Norman Russel William: Questions for Oral Answer — Questions to Ministers 
Norman Russel William: Questions for Oral Answer — Questions to Ministers 
[Volume:663;Page:11373] 
1. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: What reports has he received on the total amount of dividend payments sent offshore to the Australian owners of ASB ANZ National Westpac and the BNZ over the last 5 years; if so what is this amount? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I have not received any such reports although the information that the member is after may be available through the annual reports of the banks concerned. However he would need to ensure that the dividends that were paid had all gone to Australian owners; there may well be significant New Zealand investment in those banks listed on the Australian Stock Exchange. The Reserve Bank of New Zealand’s  
Financial Stability Report 
 released last week finds that the overall banking sector’s profitability declined during the recession but is now likely to improve as the economy improves. 
Dr Russel Norman 
: Can he confirm that according to the Reserve Bank figures to which he referred in the 5 years to 2009 the overseas-owned banks drained about $9 billion out of New Zealand; and what was the impact on the New Zealand economy of that loss of capital? 
Hon BILL ENGLISH 
: I will take the member at his word about that amount which I presume is the accumulated profits of the banks. Clearly we are anxious but if New Zealanders had saved more over the years we may well have been the owners of all our banks. But we should just keep in mind that over recent years we have had the advantage through the recession of the Australian banks being now among the 10 safest banks in the world. The fact that they have been profitable has been one factor that has helped us to get through this recession without a banking collapse. One has to look only at the effect of banking collapses on other economies to realise how fortunate we have been. 
Dr Russel Norman 
: Does he think that the Australian banks were acting in the best interests of New Zealand in 2008-09 during the recession he referred to—a time when New Zealand was short of capital—when those banks repatriated about 85 percent of their profits to Australia and retained only 15 percent of their profits in New Zealand? 
Hon BILL ENGLISH 
: There could be a range of opinions about the way banks deal with their profits—and the member and I might share a concern about whether New Zealand’s interests are paramount in the minds of the Australian shareholders—but I think it will be some time before we get the whole picture with regards to 2008-09. The point to remember is that the banks were unable to borrow in world wholesale funding markets which essentially meant the pipeline of cash coming into New Zealand was closed off and it appears that the Australian parent banks lent significant amounts of cash to the New Zealand banking system in a way that probably enabled our banks to continue to provide mortgages and overdrafts to New Zealand households and businesses. I am a bit reluctant to criticise them for the most recent period of the last 2 years through the banking crisis. 
Dr Russel Norman 
: Does the Minister agree that if Kiwibank were sold to overseas owners then any profits from Kiwibank would be added to this drain of capital from New Zealand adding further to our current account deficit? 
Hon BILL ENGLISH 
: The Government’s position on that issue is quite clear: there will be no sales of any assets in this term of office. If that position were to change then the terms of that decision would be announced to the electorate before the election so there would be plenty of opportunity to debate them and then National would campaign on them. 
Dr Russel Norman 
: In light of his comments floating the possibility of a partial privatisation of Kiwibank what mechanism does he propose to use to prevent New Zealand shareholders in a privatised or partially privatised Kiwibank from passing their shares on to overseas owners? 
Hon BILL ENGLISH 
: I cannot answer that question directly because the Government has not considered any of those issues at all. 
Dr Russel Norman 
: Does he agree with the Kiwibank chief executive officer Sam Knowles that the big Australian banks are “comfortable established incumbents with a focus on maximising profits rather than competing” and that Kiwibank introduces a much-needed element of competition in the banking sector—competition that might be lost if Kiwibank were privatised and sold to overseas owners? 
Hon BILL ENGLISH 
: Yes. 
Dr Russel Norman 
: If Kiwibank is sold to Australia will the Government require Kiwibank to change its theme song from “God Defend New Zealand” to “Advance Australia Fair” or perhaps to “Advance Australian Profits”? 
Hon BILL ENGLISH 
: I would find that question easier to answer if it were not asked with an Australian accent. 
Dr Russel Norman 
: I seek the leave of the House to table a potential Kiwibank advertisement to be used after this Government privatises Kiwibank. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House.