Harawira Hone: Westpac New Zealand Bill — In Committee Third Reading 
Harawira Hone: Westpac New Zealand Bill — In Committee Third Reading 
[Volume:633;Page:5229] 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Chairperson. Last night while we were discussing the Insolvency Law Reform Bill it seems that we forgot some really important statistics. So being ever-helpful as we are the Maori Party humbly brings the following information before the Committee to help us better understand the Westpac New Zealand Bill as well. 
In 2002 47 percent of bankrupts had more than one credit card 53 percent had two to four of them and only 17 percent of bankrupts were Maori—thank heaven! These are big issues that we face—issues that banks like Westpac and other important banks in Aotearoa must address in order to protect their clients’ finances. Yet as the cash registers were ringing last Christmas the Banking Ombudsman was condemning banks like Westpac for encouraging their customers to take on debt they could not afford for extending credit to clients that could not make the repayments and for giving credit cards to people who had not even asked for them. 
There is an old saying about a weka escaping a snare and not going back to it. In this case though it was precisely because of the way Westpac snared its customers and dragged them back into debt that along with BNZ it jointly won the 2005 Roger Award for the worst transnational corporation operating in Aotearoa—the first banks ever to win the Roger Award for being corporate criminals. The award described how both banks pressured their staff to sell credit cards to people rather than to provide things that the customers had actually asked for. It is the McDonald’s philosophy. Instead of fries with one’s meal the banks are serving up debt with one’s credit—and they are making their staff serve it up by forcing them to meet targets based on increasing customer debt or losing their jobs. 
Westpac staff are required to meet a specific target of 8575 points a year and although every new account opened attracts 10 points selling a credit card gets the staff member an extra 25 points. Union spokesperson Karen Skinner said that these targets are putting increasing stress on bank workers and customers alike and they also place stress on the New Zealand economy. Why are staff paid incentives to put customers into more debt and why is it that if the staff do not sell enough their jobs can be under threat? 
The Maori Party will support this bill because it will enable the Reserve Bank to ensure that Westpac and all big banks operating in Aotearoa are incorporated here. We support the view of New Zealand Trade and Enterprise that because banks are vital and strategic players in our economy they should come under the control of this country’s laws and local incorporation offers that greater level of domestic security. 
But protecting assets and savings must also recognise the huge levels of bankruptcy insolvency and credit card debt this country has. I tell members to think about this: New Zealanders are the worst savers in the OECD bar none. For every $1 we earn we are spending $1.13. This time last year we owed more than $4 billion on credit cards—up a full $217 million on the previous year. It is hard even to contemplate what this year’s credit card debt level might be. We cannot just ignore these facts and forget to mention them here or just say tut-tut and condemn people for not being thrifty enough and hope that it all goes away. We all have a responsibility to talk about this and to deal with it. 
Westpac when lending credit to customers must be bound by the code of banking practice to act fairly and reasonably towards the customer in a consistent and an ethical way. The explosion in numbers of credit cards and the greater use of credit cards instead of cash and the growth of e-commerce and the use of performance targets are forcing Westpac staff to sell more and more debt to Kiwi customers. Incorporating Westpac here is expected to protect Kiwi depositors if Westpac goes belly up because current Australian law gives Aussies first call on the funds and limits overseas claims. It means that when incorporation is complete it will be Kiwi customers at the front of the line and we welcome that. 
The bill is also supposed to make the New Zealand banking system more resilient in times of stress make Westpac subject to the same rules for capital and insolvency as all the other banks in Aotearoa make Westpac answerable to the Reserve Bank for regulation monitoring and discipline and enable the Reserve Bank to better manage any potential bank failure. Hopefully that will mean New Zealand does not have to deal with the wider costs of bank failure like a collapse in investor and consumer confidence higher borrowing costs and low economic growth. 
But the questions we keep coming back to are what about Westpac customers trapped in credit dependency? What about those customers who are overspending and plunging into bankruptcy? Last night I reminded the House of the dream of Martin Luther King—that hopefully we might never open an account in the bank of justice only to find it bankrupt. In Westpac will we find a bank that dispenses justice to its customers and treats its employees fairly justly and with accountability and integrity? When I think of its staff targets and its drive for profit at any cost I harbour deep concerns about Westpac’s moral bankruptcy ethical insolvency and lack of social responsibility. This bill also states that current staff who become employees of Westpac New Zealand should have their contract of employment protected so we will be watching carefully to see that this does indeed happen and to see that Westpac employees’ rights are upheld in this process. 
The Maori Party will support the third reading of this bill in order to support initiatives that protect our nation’s economy as well as the finances of its clients. But we will also hold Westpac to account for its investment in social responsibility and efforts to promote a genuine progress index. We will be watching carefully to see whether the growing of its assets is matched by the growth in well-being and security of its staff and clients. Kia ora Mr Chairperson. 
Preamble and clauses 1 to 24 agreed to. 
Bill reported without amendment. 
Report adopted.