Burns Brendon: Westpac New Zealand Bill — First Reading 
Burns Brendon: Westpac New Zealand Bill — First Reading 
[Volume:669;Page:15947] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 Labour supports the Westpac New Zealand Bill going to the Finance and Expenditure Committee. We want to see a very strong banking sector. It is fundamental to our economy. It is also a fact of life that our banking sector is dominated by the four major Australian-owned banks. They hold more than 90 percent of the banking transaction market. It is to the credit of those Australian-owned banks that over the last few years we have seen what I suppose is more restrained lending in our nation than in other parts of the world. Members can refer to Ireland currently where the banking sector is at the heart of the financial collapse leading to savage public funding cuts and a rescue package led by the European Union. 
But the Australian-owned banks are not all covered in glory. Of course in a number of sectors here there has been lending beyond what is appropriate and there have been some fairly strong views voiced that the Australian-owned banks including Westpac were riding interest rates—and perhaps are still riding interest rates—in the wake of the losses they have sustained in the face of the global financial meltdown. That is why it was important that the Australian-owned banks including Westpac should have supported the Labour-Greens inquiry into the banking sector an inquiry that was set up only because the Government refused to have a wider officially sanctioned review of the banking sector. As we know Westpac did not support that review nor did any of its colleague Australian-owned banks. We do not hold that against Westpac but it might give further thought to supporting any future reviews. 
I would also like to comment on the issue of the chief executive’s salary. Frankly it is unacceptable for the pay package of a chief executive of any institution—be it public or privately owned—when we are still in the toughest economic times in a generation to be worth more than 100 times the value the cost the income of some of the staff he is representing. There is an extraordinary disparity between what the ordinary workers are receiving and what the chief executive—who even when all due credit is paid is on a very very high salary package—is earning. When we consider that the average Westpac customer support worker is earning from around $45000—that is 124th of the package that the Westpac chief executive is receiving—we see that there is a huge disparity. 
It brings to mind that questions are starting to be asked around the world about pay equity. In Britain the Tory Government the new David Cameron - led Government has established a review of pay equity led by none other than a fellow called Will Hutton who is a staunch Labour supporter and well-known commentator and journalist. That review is going through some of the issues that have seen these kinds of extortionate salary levels paid to senior figures and the disparity between those salaries and those of ordinary people earning ordinary incomes. The review is getting very wide support from some surprising figures one of them being Michael Portillo a former Thatcherite Cabinet Minister who has acknowledged that when market reforms were set in place under the Thatcher administration there was an expectation that the private sector would show some restraint that the gap between those on the top those at the bottom and those in the middle would not grow and grow and grow. Unfortunately that is what we saw in Britain and that is what we see in New Zealand today. 
Labour members support this bill going to the Finance and Expenditure Committee for further review; that is appropriate. We support this legislation but we do so in a spirit that says the Westpac chief executive needs to consider the equity of his salary package. There are issues involved there as far as many New Zealanders are concerned. Ultimately the customer is right. Ultimately those sorts of issues can have an impact upon the choices that consumers make in the market. I would note that other bank chief executives’ salary packages are around half the level or thereabouts of that enjoyed by the Westpac chief executive. 
I would like to comment very briefly on one other issue in respect of Westpac. One of its major call centres is sited in my electorate of Christchurch Central. There are some question marks still about the future of that— 
The ASSISTANT SPEAKER (Eric Roy) 
: The member’s time has expired.