Peters says we need to consider if NZ needs a deposit guarantee scheme like in Australia, but won't be drawn on whether the NZ First policy has been discussed with National or Labour

By Alex Tarrant

Winston Peters wasn’t being drawn on immigration policy Wednesday, although he did bite softly when asked about his desire for a deposit guarantee scheme for majority New Zealand-owned banks.

Meanwhile, he indicated that compromises were being found on certain policy areas not held in common between the negotiating parties. There had been “huge progress” finding out what was agreed on or not, what might still be negotiated, and where things might be taken in the future by cooperation.

“So that, at the end, you may not have their decision or our decision as to policy, but a mutual decision,” Peters told media waiting for him as he returned from meeting National Wednesday morning.

He said those talks went well, and that he was getting closer to making a decision. However, he wouldn’t talk further about the process we might see on Thursday, including whether the New Zealand First caucus would meet with the board at some point during the day to choose which deal to take.

Peters on Tuesday evening said that while he might have made a decision on which way he might go by Thursday night, he was unlikely to make this public until after Thursday.

Immigration

One journalist tried asking about a specific policy area in a way that Peters might be drawn to comment on it: Would NZ First voters who supported the party due to its immigration stance be happy when the outcomes of government formation talks were known?

Peters cottoned on to it, though. “Is this an attempt to entrap me? In a comment which I can’t make? Which I told you on day one I couldn’t make. I mean, can we try and cooperate here without me looking like I’m being evasive, because I’m not.” He was sworn to secrecy.

Deposit guarantee scheme

I tried with another area - NZ First’s policy for a deposit guarantee scheme for majority NZ-owned banks. In one of his first press releases after the election, he had warned of economic risks facing New Zealand due to hot international money flows into our banking system. Was this him pushing the need for depositor protection?

“Well, the reality is that, if we end up needing that, it would be a very parlous situation,” he said. “But we still need to consider it. I’m not making this part of any discussion at the moment; all I’m saying is, any country, in the Western world in particular, would be having regard to the Australian - for example - deposit guarantee scheme, as opposed to the absence of one with Australian banks in New Zealand.”

I asked him to clarify that they weren’t talking about the policy in the discussions. “No, I didn’t say that. I didn’t say I was, or I wasn’t,” he said. (He may have been trying to say earlier: 'I’m not saying that I'm making this part of any discussion at the moment'.)

Waiting for the Greens?

Then onto the Greens again. Was he concerned that the Greens would need to go back to their membership to ratify any deal with Labour and New Zealand First?

“Look, you should know far more about the Greens than I do. But they don’t have to go back to their membership, they have to go back to about 170 members. Even I know that.”

Here, he was referencing that the Greens in fact need agreement from 75% of delegates representing the party’s membership to ratify a deal – something which is expected to be possible over email or online rather than the party having to fly them all to one location.

So, perhaps a positive note there for James Shaw – if you read that as Peters not being to fussed about the time the Greens might need to be allowed to say they support a Labour-NZ First deal.

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11 Comments

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Nz herald is such a National Fanboy, what a joke .
Latest headline:
'Coalition talks: NZ First, National 'making huge progress'
Makes it sound like Nats and Winnie are making huge progress, when he was talking about huge progress overall

I am loving the media vs Winston frenzy day after day. Even when he calls them out for inaccurate reporting (see: today's 'gross misinterpretation of government' spiel) they still find a way to twist it to create drama.

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Yes! We need a deposit guarantee scheme (yesterday) to protect the banking system from the coming meltdown. I do not fancy taking a haircut on my term deposits under the OBR. The risk should remain in the arena of the greedy novice specuvestor!

But if deposits are guaranteed, what incentive is there for a bank to try and protect deposits?

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Deleverage bank capital adequacy levels with higher risk weighted asset ratios - hence reducing the profitability and consequent restriction of loans with little capital loss cover.

That would certainly change how much the banks lend and to whom. Just what we need to dampen the housing market. Let’s reweight the capital required for home mortgages and see where the volumes lent and loan pricing go.

Make the banks pay for it. Then there will an incentive.

A good piece from Patrick Smellie on trying to find out who's on the NZ First board:

http://business.scoop.co.nz/2017/10/10/nz-first-board-membership-closely-guarded/

What is needed is a Glass- steagall type setup where the everyday banks people and business use get separated out from the derivative risk associated banks.........?

The big 4 banks collectively create billions of profit for their offshore parents, and should there be a failure depositors are liable for a haircut, I prefer to call it theft, a proportion of their profits should go to an insurance to protect customers and investors.

Their profits are pretty average and in the middle of the pack of NZ public companies Viking, so perhaps we should demand every NZ company that borrows from the public should have to pay for an insurance to protect them ?. Of course what you're really saying since that costs will be passed on by those businesses to every customer, is that we should force investors/savers in any investment/savings vehicle to buy insurance to cover their risk. Personally I'd prefer not to do that but rather spread my risk around institutions and understand what risk management actually is - its not someone else covering your butt for your bad decisions.