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New Reserve Bank Governor Graeme Wheeler misled Parliament on bank profits, Green Party claims

New Reserve Bank Governor Graeme Wheeler misled Parliament on bank profits, Green Party claims
Reserve Bank Governor Graeme Wheeler

By Alex Tarrant

Reserve Bank Governor Graeme Wheeler has responded to a claim by the Green Party that he misled Parliament's Finance and Expenditure Select Committee on bank profits.

Green Party co-leader Russel Norman took exception to a comment Wheeler made to the Committee in early November that compared to bank returns on assets (ROA) across "most OECD economies," New Zealand banks' ROAs were "about average or below."

Norman released Reserve Bank charts which he said showed New Zealand banks were the fifth most profitable banks in the OECD, with only Iceland, the Czech Republic, Singapore, and Australian banks above them.

“The Governor was wrong to tell Parliament that our foreign-owned banks are only making average, or below average profits,” said Green Party Co-leader Dr Russel Norman.

Norman made no mention of State-owned Kiwibank, which also made a record annual profit in the year to June 30, 2012. (See Kiwibank annual profit surges 276% to record high of NZ$79.1 mln on higher net interest income and falls in expenses and impairment allowances).

Wheeler responded later on Tuesday, saying data for the period 2009-2011 showed returns on equity and assets of New Zealand banks appeared to be in line with other advanced economies.

Finance Minister Bill English dismissed Norman's claim as politicking. However, analysis by interest.co.nz shows in their most recent financial year the New Zealand subsidiaries of the big four Australian banks - ANZ, ASB, BNZ and Westpac - delivered an average return on equity 320 basis points higher than that of their parents at almost 19%.

And earlier this year the Bank for International Settlements anointed Australia's big four banks as the developed world's most profitable as measured by pre-tax profit as a percentage of total assets. Analysis by interest.co.nz showed the New Zealand subsidiaries were even more profitable than their Aussie parents with the average pre-tax profit as a percentage of total assets across New Zealand's big four 20 basis points higher than their parents at 1.39%.

Read Wheeler's statement below:

Reserve Bank Governor Graeme Wheeler today commented on bank profitability data that was released recently to the Green Party.

The Bank also released the data for the period 2009-2011, which shows returns on equity and assets of New Zealand banks appear to be in line with other advanced economies (excluding euro area countries).

Mr Wheeler said the Bank commissioned the data before the Finance and Expenditure Committee hearing into the Bank’s Financial Stability Report on 7 November.  However, the analysis was not complete at the time of the hearing, at which he was asked about bank profits.

“My response to the Select Committee represented my understanding of the information available at that time.  Our analysis was completed after the hearing and we released it to the Green Party in response to their request, which followed the hearing.  We are now releasing it publicly.”

Mr Wheeler said different measurement practices around the world, including or excluding tax and extraordinary items, meant that international comparisons of bank profit figures are not straightforward.

“Profits in the New Zealand banking system reflect relatively low levels of non-performing loans, and low cost-to-income ratios, compared with many other countries,” Mr Wheeler said.

Mr Wheeler denied the Green Party’s statement that the Reserve Bank is biased in favour of Australian banks.

“The Reserve Bank takes seriously its mandate from Parliament to supervise the New Zealand banking system, and it does so without favour.  Australasian-owned banks emerged in better shape from the global financial crisis because of their more conservative management, and our economies benefit from that strength.

“New Zealand’s strong banking system helped see the country through the global financial crisis.

“As I said at the Select Committee hearing, bank profitability has recovered to where it was prior to the global financial crisis, based on returns on assets.  If you look at the return on equity, they haven’t got back to where they were prior to the global financial crisis, and that’s partly because these banks are building up capital as part of the tougher Basel III regulatory requirements.”

The data

Banking System Comparisons of ROE and ROA

The charts below provide comparisons of average Return on Assets (ROA) and average Return on Equity (ROE) for advanced economies including New Zealand for the period 2009-2011. Banking systems in the euro area have been excluded from the comparison as bank performance in the region has been severely affected by the recent financial crises and resulting downturn in economic activity.  The charts show that ROAs and ROEs for the New Zealand banking system are within the range of those of other advanced economies.

Source

The source for the comparisons in the charts below are the IMF’s Global Financial Stability Report which draws on the IMF’s Financial Stability Indicator (FSI) dataset.  Averages for the period 2009-2011 have been calculated by the Reserve Bank.  Estimates of returns for New Zealand banks (on a pre-tax and extraordinary item basis) have been sourced from aggregate General Disclosure Statement data compiled by the Reserve Bank.

Please note that ROAs and ROEs for some countries are reported prior to tax and extraordinary items while others are reported on a net basis. To assist with comparisons, estimates of ROA and ROE for New Zealand have been shown on both bases.  Countries reported on an after tax and extraordinary items basis are asterisked.

* Indicates ratio calculated after extraordinary items and taxes.

Misled

Earlier on Tuesday, the Green Party issued a statement claiming new Reserve Bank Governor Graeme Wheeler has misled Parliament's Finance and Expenditure Select Committee on bank profits.

See the release from the Greens below:

Reserve Bank Governor Graeme Wheeler misled Parliament at his first appearance at the Finance and Expenditure Select Committee when he told the members that bank profits were “about average or below” most other OECD economies, the Green Party said today.

Data now obtained from the Reserve Bank by the Green Party under the Official Information Act shows that New Zealand banks’ pre-tax returns on assets from 2009-2011 make them the fifth most profitable banks in the OECD, with only Iceland, the Czech Republic, Singapore, and Australian banks more profitable.

“The Governor was wrong to tell Parliament that our foreign-owned banks are only making average, or below average profits,” said Green Party Co-leader Dr Russel Norman.

“The Reserve Bank’s own bank profitability data ranks our big four Australian banks as the fifth most profitable in the OECD.

“Our new Governor’s complacency about bank profitability is concerning. His job is to regulate our banks, not be their champion.”

Earlier in the year, the independent Bank for International Settlements found that Australasia's big four banks were the most profitable in the developed world for 2010 and 2011. In 2011, Australian banks made a pre-tax return of 1.19 percent on assets compared with a global average of 0.36 percent.

“The Governor’s mistake demonstrates one of the limitations of having one person solely responsible for the decisions of the Reserve Bank,” said Dr Norman.

“Boards make better decisions than individuals and are less prone to capture by the industry they regulate. This is why no other OECD country vests this much power in one person.

“The simple fix is to make the Reserve Bank Board accountable for significant Reserve Bank decisions – like setting the Official Cash Rate – and ensure the Board includes representatives from the wider economy, like the export and manufacturing sectors.

“The excessive profitability of our Australian-owned banking sector is to the detriment of other sectors in the economy, like manufacturing and agriculture, and affects anyone on a personal level that has a mortgage, credit card, or has savings in a bank.

“If we care about creating jobs and maintaining our incomes, we can’t afford to have a complacent bank regulator that looks at excessive bank profits and then looks away.”

Reserve Bank profitability data released under the OIA: http://www.greens.org.nz/sites/default/files/reserve_bank_banking_system_comparisons.pdf

Here is a transcript of Wheeler's comments on bank profits made to the Committee:

“If you look at return on assets in New Zealand, it’s recovered to where it was prior to the global financial crisis.

“If you compare it to the return on assets across most OECD economies, we’re in fact about average or below.

“If you look at the return on equity, we haven’t got back to where we were prior to the global financial crisis, and that’s partly because these banks are building up capital as part of the Basel III requirements, and the Reserve Bank’s requirements.

“So ROA – return on assets – probably at the OECD average, or slightly below. ROE, not back back to where it was back in 2007.

“In essence we want a strong, competitive banking system. We want it to be competitive and efficient and basically to be a contestable market – not to have barriers to entry – and to force these institutions to compete amongst one another.

“And we see a lot of competition there.”

Playing politics

Finance Minister Bill English told media in Parliament on Tuesday morning the claim by the Green Party was mere politicking.

“Any information I’ve seen is pretty consistent with what the Governor said," English said.

“I think this is about Russel Norman competing with the Labour Party to be Opposition Finance Spokesman, but actually the only one in there with experience is Winston Peters," he said.

“I don’t think it’s serious at all. I think this is just Opposition politics.”

“They’ll get the chance to put that to the Reserve Bank Governor when he comes to the Select Committee [on Thursday].”

We welcome your comments below. If you are not already registered, please register to comment.

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51 Comments

Ican't wait until this green crowd get into power.

Apparently companies can make a profit but not too much.

For your imformation profits  provide jobs and allows you to keep up with the latest technology and also pays divedends to shareholders.

NORMAN should be asking his own members hoe much profit they are making on their rentals and then we maybe able to make a comparrison with the banks.

a vote for this mob is a vote for state control of everthing. COMMUNISM maybe.

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"Apparently companies can make a profit but not too much.
For your imformation profits  provide jobs and allows you to keep up with the latest technology and also pays divedends to shareholders.
"

By "companies" I assume you mean groups that produce something helpful, rather than banks that "loan" you money by creating it out of nothing, then charge interest on the money they printed, who talk about tight margins when they don't make money on margins, but on the fiat currency that is typed into a computer system?

Don't get me wrong gold man, I'm no greens fanboy, but I have no problem with them calling a supposed independent authority to accountability when it appears there is no longer independence

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I think you will find the ANZ has increased profits and downsized staff requirements at the same time as have their competitors...so create jobs..? no I don't think so, live off the back of  the mortgage industry..... yes .producing nothing but debt , debt interest , debt wealth.

 Input like that  we need less of . 

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This is a strawman argument. The greens have nothing to do with communism. If you bothered to read some of their economic policy you'd find that its generally pragmatic. By your reasoning, is a vote for the Nats a vote for facisim?

 

Good on the greens for challenging Wheeler. At least the greens have ideas.

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Printing money is very pragmatic!!

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Its been used as a tool plenty of times in the past and currently. If I recall the Greens policy was focused on infrastructure bonds, so it was focused on particular outcomes. And it is a pragmatic solution. If NZ trading partners are printing then a pragmatic approach would be to look to do the same. Blind idealogy has got us where exactly?

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I agree it has been used as a tool. The difference my equinely (?) challenged man is who is doing the printing. I agree with you we should be doing some of the same currency creation, but not give that priveledge to a private profit driven bank. When private banks are printing to make profits, it is very different to when the RBNZ is creating the money. Most obvious of which is that currently our country is going into debt and paying private banks interest, whereas there is no need to go into that volume of debt in the first place since we have the sovreign right to create our own currency via RBNZ. Currently they have only restricted physical cash, which is why private banks can create currency digitally (since it doesn't break that archaic law created before computers).

http://positivemoney.org.nz

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The commercial banks have printed about NZ$30 billion in the last four years.

See here:

http://www.tradingeconomics.com/new-zealand/money-supply-m3

I'm not sure why we are so happy for them to do so; but resistant to any idea of printing ourselves, even though theirs inevitably means greater national debt; and the cost of servicing that over time increasing dramatically.

The increase in money supply they have caused has not been inflationary; but has caused a very disruptive lift in our exchange rate.

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If you bothered to read the Green's manifesto you would actually see they are quite libertarian in some ways as opposed to totalitarian....

Communism has never really existed except on paper, if you think that then your reality is questionable.

In terms of profits provide jobs, excessive monopolistic profits can also take jobs away. A classic would be telecom screwing ppl over....if they are the ones sucking the life blood out of small businesses it benefits selected shareholders, maybe.

So what the green's are saying is, level the playing field and keep it that way.

regards

 

 

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Banks aren't companies in the traditional sense...they have no real cost of production. Classical economists made a distinction between productive and unproductive enterprises. 

Banks feed on the real economy, they are extractive in nature. We need banking and credit but it is certainly not necessary for them to be private. Remember that they issue public credit. New Zealand dollars backed by New Zealanders. If they borrow offshore that is a problem for us locally.

Russell Norman is the only politician that really understands the danger of monetarism.

Cheers

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Geez Splineman you cant get anything done for the bureaucrats now. imagine having to go and get a business loan from them? If a business model didn't fit into designated box of State owned banking - you'd be screwed and probably on your way to Australia.

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So what your saying Goldie is that when Telecom made enormous profits after being given away into private ownership they then took on more staff and invested in new infrastructure and that's why we are so far ahead of the rest of the world with our communications technology.

A case of the blinding light of ideology.

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Exactly....

regards

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It's not the content that actually matters, folks. 

 

It's Norman talking his electoral book.  Simple process:

  • Pronounce on some topic or other (content irrelevant)
  • Appear wise but contrarian
  • Get reported
  • Get reported
  • Get reported
  • Get the book build momentum happenin'
  • Watch it slowly transform into Electoral Support
  • Wash, rinse and repeat.

As proof, just lookit the goofs on this 'ere thread who have already fallen for - what was the subject again?

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Firstly waymad there is nothing wrong with adopting vote popular tactics, wash ,rinse ,spin cycle or not.

 By my recollection there was no shortage of goofs voting A Brighter Future twice or Helena Handbasket three times.

 You place your strategy according to the voter pool your presented with, if they are largely goofs, but still entitled to vote, it would seem a little stupid not to cater for them now wouldn't it.

 However I'm happy to believe Norman has been listening , has been observing, and has no more than echoed the sentiment  believed by so many ,many goofs (myself included) here, that the RBNZ is a captured organisation who have appeared complicit in the better interests of  the larger Banking Institutions operating here in New Zealand.

I'd go on to entrench my goofyness(is that a word..?) by suggesting that Mr Normans revulsion with the level of profits Banks are gleaning during these tough times is justified and supported  by a wide section of the community.

I'm not off to hug a tree just yet , but  I like what I see.

 Good luck to him for at least acknowledging the stench coming from the pile of dung the Elephant in the room relieves himself of with monotonous regularity.

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@ Christov -lol

And -

 

“Profits in the New Zealand banking system reflect relatively low levels of non-performing loans, and low cost-to-income ratios, compared with many other countries,” Mr Wheeler said.

 

The low cost-to-income ratio excuse is a sad reflection of the low average pay levels offered to New Zealand bank employees.

 

I hate to harp on about this - but I still remain astounded by these two graphs here and here and how well they reflect one of Mr Wheeler's interpretations of profligate bank profits - such low NZ incomes relative to other nations must surely be a systemic risk factor that will eventually undermine banking stability. Graphs courtesy ZH.

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Yeah that was a superb piece on ZH.  Blew me away too on the NZ comparison front.

 

Funny they raise a Marxian type worker uprising/resistance - whereas I'm thinking it might be more like a French Revolution when it happens - more anarchist/less socialist in its orientation. Workers have to be employed to "unite" .. and by the time it really breaks loose, how many of the revolutionaries will be working?  Not many I suspect.

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In your first link regarding labour related insurance costs and taxes, New Zealand is so low compared to European Countries because in Europe there is compulsory social insurance (to cover health-  unemployment- retirement- holiday pay insurances), deducted  at a percentage from wages, whereby the employer has to pay more than the employee, hence the high costs of labour, which are actually crippling for many businesses.

Refers to first link from Stephen Hulme.

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Norman has yet to grasp a fundamental....the banks run the economy!

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Actually I think he gets that.

regards

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heehee....yeah can't argue with that. I wonder how the international community would respond to a Green's government in NZ......just musing.....

Cheers

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That forms the heart of National's policies. The armageddon threat of the "markets" as the reason for sticking to the status quo. The current system might not be working but there is no alternative in National and Labour land. To them we committed to the neo-liberal clap trap 30 years ago and now we have no choice but to play it out to its inevitable conclusion.

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Bond vigilantes and ratings agencies might actually start noticing our woeful current account deficit and foreign debt situation...with a Green Government.

Would get our currency down...

Maybe not such a bad thing.... ;)

cheers

Bernard

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Updated with Wheeler's comments made in the Select Committee, also Bill English's response

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NZ has a quad-opoly...or maybe now a tri-opoly....its a nice cosy arrangement...competition it isnt.  Now if he's saying to make the systems more resilient that margin is needed OK, but he needs to be honest about that.  If indeed the banks are gearing to basil-3 then that suggests their real profit is actually higher....

regads

 

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RBNZ response in there now

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“New Zealand’s strong banking system helped see the country through the global financial crisis."

 

Ah no the RBNZ's emergency liquidity measures and Government Guarantee on deposits saw them through the crisis. Without those they were toast. The banks business model works great except during a financial crisis but the RB has deteremined that because they are so rare the banks shouldn't be expected to allow for them in their business model with greater reserves. Instead, unlike other businesses, they are regarded as special and will be given assistance to get them over any "hump"

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thank heaven someone pulled up that obvious lie. The NZ banks lend long e.g. for mortgages; and borrow short term because that's cheaper. They were caught out in the the GFC in 2008 and bailed out by reserve bank with emergency liquidity injections  and  gaurantees. Bollard came up with the core funding ratio so it wouldn't happen again i.e. more local deposits and long term borrowing, if they lend it long. National, of course, shelved this.

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Yep in light of the recent polls, I'd like to see a proper comparison of the economic policies of the Nats, Labour, and the Greens. I'm pretty sure that the more creative and progressive policies would be in the Green column. The Nats are doing all the same old nonsense that got us into this mess, Labour are only slightly to the left of them, and the Greens have re-written the bulk of their policies in the last few years as they move from a Hippy-manifesto to Gren/Centrist policies.

It's too easy for people like Ngakonui Gold to make generalisations, but thats what they're up against.

I think if they came out with a Norway-esque oil and gas policy they'd really shut some people up. The first party to do that will gain some ground for sure - especially with Petrorbas pulling out of NZ

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Hi Vanderlei,

We published each party's policy leading up to the 2011 election in our party policy section on the right hand side of the news section.

http://www.interest.co.nz/news/54024/election-2011-party-policies-econo…

Cheers,

Alex

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Thank you Mr Wheedler for your myopic response.

 If only your focus could be improved to view the wider productive economy , I'm sure we'd be galloping along.  I had no idea mortgage competition held such a high priority  in the RBNZ's charter.....I mean I suspected as much, but never dreamed you might announce it.

Might I suggest you make use of the Two Fingered Salute app and forward a copy to Mr Norman in commiseration.   

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I wish I had your faith in the potency of monetary policy.

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Those parting comments from Bollard and now Wheeler confirm the RB's main objective is maintaining banking sector profits in the interest of "stability". These huge privately and mostly foreign owned corporations have been given a free reign to exploit New Zealand, creating large profits from a business model that only works in good times, knowing full well they are too big to fail when a crisis hits and that model is exposed as inadequate. What other private company has that protection?

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Green's Infrastructure Bonds might be a marvy investment, chaps and chapesses.

 

They might even be as good as a small-city US Muni bond, like, say, Vallejo (CA) or Central Falls (RI)!

 

And given that Infrastructure Bonds are predicated on a long-term, sustainable revenue stream arising from the economic growth attributable to the infrastructure thus constructed or at least bought and paid for, I'd be interested (Really!) in PDK and other Peak <insert yer fave doomer term here> people's opinion of such a financial device.

 

Really!

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Waymad - I'll bite. Too hot out in the garden, anyway.

 

If that's a serious proposal, then it's as fatally flawed as any of the Labour/Nat offerings. What we have, I think, is a populace who have lived all their lives with the expectation that 'having money' always guarantees being able to buy  'stuff'.

 

Let's assume that 'economic growth' doesn't mean GDP growth (which is artificial horsepoo) but a meaningfully-measured increase in real activity. That assumes that more work will be done - exponentially more - and this in turn requires energy to be used - exponentially more too. I'll grant you the mitigating application of efficiencies.

 

Can we get 'wealthier on the basis on non-physical activity? No - but our specialised approach has many who 'earn' from nothing (giving advice, for example) but then expect to buy something tangible. If you could do it artificially, the Nats would have no need to carve into the physical landscape in multitudinous manners. That they do, says it's a physical/energy underwrite - and while we carved in in a growing manner, it appeared that the advice underwrote a 'return'. The widening gulf was filled by increasing amounts of energy being expended.

 

Beyond growth in physical resource supply (through depletion or through energy unavailability) the system lacks underwrite. Even as we debate, the biggest global destruction of 'wealth' ever, is going on; complete with flights-to-safety, etc. Some of us saw it coming.....  :)

 

Bonds will be popular, but unless you up the real activity (up the energy input) they won't give a 'bigger' return. Your assumption that 'economic growth' arises from 'infrastructure' is just like the Nats and their 'build the roads and the people will come'. If people's tanks are empty, they won't.

 

Green growth may be goot vote catching, but it's as much horespoo as any other kind. We will. though, be doing a good deal more in the resilience/sustainabllity line, which could be described as growth in green activity - just not accompanied by increases in 'wealth'.

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What we need to understand is that Australian banks are highly indebted, they are highly leveraged. Short term no problem , but if Australian banks were to continue to borrow to pay for a growing current account deficit then the risk is that in a couple of years time Australian banks will get down graded and loose their triple AAA status.  Nothing to worry about in the short term , but as we head into 2014 if Australia's biggest trading partner China decelerates then the Australian banks will come under margin pressure. This in turn will weaken Australia's Fiscal position. Anything that starts to put pressure on the Australian exports growth will start to weigh on the AAA rating of Australian banks.  Any profits the Australian banks make they save this for a rainy day.  Back to NZ,  Mr Wheeler will most likely keep the OCR rate as they are at the next meeting. Mr Wheeler has not mislead the Greens as the banks are still highly indebted even if there balance sheets have improved.

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If you are not at least thinking of voting Green at the next election you are simply not thinking.

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How true - and it almost hurts me to admit that.  Not that I'm not environmentally conscientious but in the past I used to find myself completely at odds with them on social policy basis - perhaps my aversion to them on that score went out with Sue Bradford (nice lady that she is).

 

My hope is that Gareth Morgan joins forces with either Norman or Winston or both in coalition and they campaign on a Big Kahuna platform.  I see no other way out of the welfare state trap we find ourselves in.

 

Neither Nats nor Labour will move against the status quo.  JT shouldn't have bothered re-entering the Labour fold.  Serious honesty about what an absolute mess the current paradigm is in won't get a look see from their caucus - any more than it will from National's.

 

   

 

 

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Agree, Sue et al was my worry....now she's lost and moved on Im much happier with being in the Green Party.  Their social stance/outlook is however still fairly broken....the two aspects (green and welfare/social) do clash and will clash worse as time progresses.  Things like they refuse to "come out" on population control, when that is one of the biggest  drivers of the Green issues/problems....

"Serious honesty about what an absolute mess the current paradigm is in won't get a look see from their caucus - any more than it will from National's."

Very much concur, both they and indeed NZF are similar no hopers....change will have to overwelme them.

regards

 

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What NZF policy/positions do you see as dumb?  Winston's definitely not a status quo type - they've been banging on about the RBAct for ages.  And since the beginning they've been wanting references to the principles of the ToW taken out of all NZ statute. You'd be surprised at the cost of that in terms of government departments, universities, etc etc all having to have regard to ToW issues in their policies and programmes.   I'm just plain tired of the separatist NZ - and I've got four grandchildren who are tangata whenua.

 

 

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What`s separatist about including our founding document into public policy?

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Nothing separatist or objectionable (from my point of view) about the Maori version of the Treaty being constitutionalised.  What Winston is on about is not the Treaty text itself - but the use of these various words come to be called the 'principles of the Treaty'.  These 'principles' (there are three versions of what these 'principles' are - one from the Waitangi Tribunal, one from the High Court and one from the HC Labour government, which seems to have become the default government made up words on the matter) bear little relationship to the actual words in the Treaty articles.  They are modern interpretations of what the intentions of the Treaty were.  I don't think we need to try and second guess what the intentions of the Treaty were - given we HAVE the Treaty to speak for itself!  We should honour the Treaty, for sure, and settle historical grievances (much more fairly than it appears we are, I might add).  But these principles as all government entities are required to address in their policies and their work programmes create inequities - separatist related intentions and hence divisive type outcomes.

 

 

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NZF on AGW, energy.....Winston's a "me, me, me type" Ive listened to the rest on 22 and they dont make the grade....but then few do.

ToW, im on the fence for that, I see it as a bit OTT at times but others that it gives an important minority a voice.  A counter-balance to the middle aged, angry, poorly educated, blinkered white male continginet/attitude. A group who seem to have the privaledge of punching beyond their weight,  for no good reason.

regards

 

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Every green party policy seems to end in more tax, which I am not keen on. Not only is it an expensive option it is also intellectually lazy or naive to think tax solves everything.

 

I've seen very little rational thought from them on economics. Apparently Mr Norman believes we can print our way to prosperity like Zimbabwe did, an idea I do not agree with.

 

I am not a carbon nazi so feel I have very little in common with their environmental policies.

 

The only thing we have in common might be a desire to see clean rivers.

 

I reject your proposal that this amounts to non-thnking.

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No, non-thinking is anyone who blindly votes for the party they have always voted for.  Or rejects scientific evidence out of hand.   Which pretty much sums your position up IMHO.

Greens on tax, I dont believe you have even read what they are saying. Its far more rational in terms of following the keynesian models than the vooddoo models of much of the right.  It is a worry though that once adicted they will just keep doing it....insidious....

In terms of tax solves everything, thats very black and white.  Sweden for one has a far higher tax regime and yet is doing better than most.  The USA has reduced taxes and yet is in the doldrums....Now yes there are tax thresholds that are counter-productive, but the work Ive seen suggests its far higher than the present top rate....ie 70% when we are at 30%.

regards

 

 

 

 

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Finance Minister Bill English dismissed Norman's claim as politicking.

 

Since when is stating a fact politicking?  Reminds me of this cartoon;

 

http://standupforamerica.wordpress.com/2009/08/25/defining-the-greater-good/facts-are-coming-cartoon/

 

Probably funnier to us yanks who grew up repeating the 'catch cry' associated with the story of Paul Revere's famous ride; 

 

http://en.wikipedia.org/wiki/Paul_Revere

 

 

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Ha. Great cartoon Kate

Cheers

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bank shareholders make attractive returns (ROE) but as reported last week the banks are only mid-pack when compared to other listed companies. banks employ thousands of NZers (probably 20-30 thousand), pay hundreds of millions of dollars in tax, and support many small business suppliers.

competition is alive and well which is good for consumers. I phoned three banks recently for a rate on my mortgage and they all nearly ate my arm off to get a crack at the business, that is good for consumers (so long as the banks are taking prudent risk - which they proved they were during the GFC).

I'm getting a bit bored with NZ bank bashing, i dont have a problem with banking in NZ.........The US & UK is a different story, people who live there can quite rightly moan about their local banks and bankers.

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The US & UK is a different story, people who live there can quite rightly moan about their local banks and bankers.

 

@ Interest, what problems have you encountered to make such bold statements? - I have always enjoyed  fruitful relationships with my US bankers - I cannot recommend enough the stabilising impact FDIC extends to depositor's savings.  

My Lloyds TSB Bank A/C in the UK, while not used much at the moment, has always been of sterling use to me - I am greatly comforted  that HM Treasury sees fit to maintain a significant minority shareholding.

 

What comforts do NZ banks extend to depositors?

 

 

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I think I will vote Green at next election.  Not that they have a clue about monetary policy but they they will in effect help move NZ in the right direction of renewable energy and innovation and show the rest of the world that we still have a Pure NZ image even if its for a short time in office. Some good would actually come out of it as both National and Labour seem quite happy wasting money on new road developments rather than moving traffic freely through our busiest cities. In Sydney they put in excellent public transport at a huge cost, but works really well. One day they woke up and relised that they were not moving in their cars and all the school kids were choking in the fumes so they had to do something. Lets hope NZ moves a bit quicker on this one and puts in a great public transport network that works rather than later on having to demolish half of Auckland at huge cost to get decent transport network of trains, taxi ferries and buses.  Oil exploration of NZ looks not rewarding for the insignificant volumes of oil out there.  If Petrobras has pulled out this is a clear sign that the volumes of oil are not viable. NZ needs to keep thing simple and do what it does best and forget rest.  Remember the rest of the world sees NZ as a clean green country where hobbits live.  Doing nothing and keeping it green is what attracts people to NZ and brings in the bucks.  Jobs need to be generated in the sustainability market.

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