Aussie banks must remove pressure to lend

Statistics New Zealand’s latest figures on the growing current account deficit highlight two significant problems for the New Zealand economy:

The first is that large overseas companies are undermining our current account by choosing to send large profits offshore rather than reinvest back in New Zealand.

Second, New Zealanders are being pressured to take on more debt, worsening our net international liabilities.

The culprits of both of these problems are, in large part, the four large Australian banks, ANZ National, BNZ, ASB and Westpac. The four are collectively making profits worth billions of dollars for their mostly Australian shareholders by pressuring New Zealand staff to sell increasing levels of debt to New Zealand customers. Banks owe it to the New Zealand economy to reduce pressure on their staff to sell debt products.

They also need to invest a greater amount of their profits in their New Zealand businesses. Doing this will also result in better service for New Zealand customers and relieve pressure on the current account deficit.