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New Zealand’s most divisive populist politico, Winston Peters, insists it is not anti-Australian for him to call out Aussie-owned banks and supermarkets for ripping off Kiwi consumers over the ditch.
Doubling down after recently admonishing Australian businesses for poor competition practices and excessive profits, the New Zealand First party leader said a banking inquiry akin to Australia’s royal commission was needed to address Kiwis being disadvantaged by “Ned Kelly” behaving badly.
New Zealand First leader Winston Peters (right).Credit: Getty
The 78-year-old political veteran, whose party has helped form three governments since 1996, has taken aim at Australia’s big four banks and their oligopoly over the New Zealand banking sector as he campaigns to return to parliament in Wellington following a 2020 election wipeout.
ANZ, Westpac, the NAB-owned Bank of New Zealand and the Commonwealth Bank-owned ASB Bank account for 85 per cent of loans and hold 90 per cent of total bank deposits in New Zealand. They are already at the centre of a government inquiry into competition, but Peters believes it will not go far enough.
“Numerous inquiries [into] Australian-owned banks ripping off Australian customers to the tune of billions and billions of dollars … I believe that that’s happening in this country,” Peters said in an interview. He did not provide specific evidence to back the claim.
“We don’t have to reinvent the boomerang. We should pay attention to what’s been done in Australia and do it here … it’s not anti-Australian at all. It is in this sense, perhaps learning something back in our country about it.”
Peters claimed that supermarkets in his country – including Countdown, which is owned by Woolworths – were making profits “over three times the inflation rate”. “Something that is not being tolerated in Australia is being tolerated here,” he said.
Peters accused local politicians of having a lack of political will, insisting that “it’s very likely that Ned Kelly is not behaving himself in New Zealand”.
On the home stretch to the October 14 general election, NZ First is polling above the 5 per cent threshold required for MPs to secure a seat and could hold the balance of power. As Peters put it: “We’re back now. And we’re way past 5 per cent, I can assure you that.”
Less than 10 days until the election, polling has the party in a comfortable position to return to parliament, while the centre-right opposition National Party, led by Chris Luxon, is on track to dislodge the incumbent Chris Hipkins Labour government from the Beehive.
Chris Hipkins (right) became NZ prime minister after Jacinda Ardern resigned. He is serving the rest of the term and seeking to be elected this month.Credit: Bloomberg
The latest TVNZ-Verian poll placed National in the lead on 36 per cent. But to govern, it will need to rely on two coalition partners: NZ First and another minor right-wing party, ACT. Labour was trailing on 26 per cent.
Political pundits suggest rising inflation, mortgage stress and soaring grocery prices have made an uphill battle even steeper for the incumbent party, which has not been able to convince voters of its strategy to address the economic challenges.
For Peters, who was deputy prime minister and foreign minister in the government of Jacinda Ardern, slamming the banks and the long-standing supermarket duopoly is a carefully crafted, populist message to resonate with disenchanted voters in the eye of a cost-of-living storm.
It follows comments he made at a town hall meeting on the North Islandcalling out “foreign owned-duopolies in the food supply market” and “foreign-owned banks: Aussies ripping off New Zealanders in this country”.
He did not say how NZ First would address the issue beyond holding further inquiries, however one of the party’s 36 election promises is to remove goods and services tax from fresh food, vegetables, meat, dairy and fish.
The chief executive of peak body Consumer NZ, Jon Duffy, said Peters’ rhetoric was little more than “another technique to blame for people’s existing situation”. Some of it was also wrong, he added.
“The duopoly is only 50 per cent owned by Australians,” he said, referring to Countdown. The other supermarket giant, Foodstuffs, is “a dinky-di New Zealand company”.
Duffy said calls for new inquiries were odd, given an inquiry into the profitability of the big four banks’ New Zealand businesses was already under way, while the NZ Commerce Commission only recently conducted a probe into the supermarket sector.
That review found the decades-long supermarket duopoly routinely cut consumers an unfair deal, triggering new legislation this year, including the appointment of a grocery commissioner.
“Where I think Winston would be better directing his energies is in what a future government can do from a policy perspective to speed up new entrants to the market,” Duffy said.
A Woolworths NZ spokeswoman said it welcomed the introduction of the government’s new Grocery Industry Competition Act, adding that the company’s profits were in line with global retailers. As for banking, Duffy said it was hard to ignore that New Zealanders paid a lot more for home lending than in Australia.
“There’s a [saying] going around that Australian consumers simply wouldn’t accept the rates being offered here in New Zealand. Well, New Zealand consumers don’t really have any choice because it’s a more consolidated market.”
Morningstar analyst Nathan Zaia said it was no accident mortgages were more expensive in NZ, given that the Reserve Bank of New Zealand imposes the highest capital requirements on banks in the world.
“If [the Reserve] is going to do that, to ensure a financial system that is resilient to economic shocks, and limit bank failures, for a bank to operate in that market it will be trying to make a decent return for its shareholders,” Zaia said.
“I wouldn’t pin it on [the fact] they’re Australian banks. I think the fact that they have to hold so much capital plays into it.”
A March survey by consulting firm KPMG found New Zealand’s banks generated a record $7.15 billion in after-tax profits last year.
An ANZ NZ spokesman said that while the bank acknowledged its large profits, they needed to be read in context of the capital that shareholders have deployed to support New Zealand households and businesses.
with AAP
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