29 March 2005
Bank must clean up act - Greens
Green MP Sue Bradford has this afternoon in the House slammed the Westpac Bank for its industrial relations record.
"This bank was one of the two recipients of the Roger Award this year for the worst transnational company in New
Zealand," she said.
The Westpac Bank Bill, which aims to incorporate the bank in New Zealand, had its first reading in the House today.
Ms Bradford outlined poor treatment of staff by the bank identified in the Roger Report.
Examples included: a pregnant woman staff member told she had to provide a doctor's certificate to prove she was in fact
expecting a child, shiftwork staff in the Wellington office left stranded at the Railway Station after trains had
finished running for the night and workers being set unrealistic performance targets in order to sell increasingly large
debt to customers.
"It's unacceptable that an employer should act in this way," Ms Bradford says.
While the number of branches has been slashed by more than half over the past 10 years and the number of staff cut by 26
percent, the bank has increased its profits almost fourfold, but increased wages just 27 percent.
"I am hopeful that when considering the Bill MPs will ensure that matters of labour relations and good corporate
citizenship are taken into consideration."
(Speech follows)
WESTPAC BANK BILL - FIRST READING WEDNESDAY 29 MARCH 2006 Sue Bradford, MP
Madam Speaker
The Green Party supports the introduction of the Westpac Bank Bill for the simple reason that we believe the banking
system operating in this country should be more under the control of this country.
We support the policy of the Reserve Bank as noted in the explanatory note to the Bill that "systemically important
banks should be locally incorporated in New Zealand".
Although Westpac may find it is having to make a giant leap in having to incorporate here, including through this
legislative process, in reality this Bill is only a small step in the long march for New Zealand to regain its economic
sovereignty.
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I, like many others, was bitterly disappointed when the Trustbanks in New Zealand - with the exception of Auckland and
Taranaki - were amalgamated and then privatised into Westpac's grip. These Trust Banks were synonymous with communities,
ordinary kiwis' mortgages, and local economic development.
Of course the assets of these Trust Banks continue to support the communities of this country, but this is not the same
thing as owning the bank, of having some local control over local saving and investments.
And let's see what has happened in the last 10 years since Westpac took over the Trustbank network.
Well, in the prestigious Roger Awards for the worst transnational operating in New Zealand, the 2006 award went jointly
to Westpac and the Bank of New Zealand.
The judges' report and supporting documents make sobering reading.
Ten years ago Westpac (and Trust Bank which it later took over) used to employ 6,760 staff. Today it employs only 5,004
staff. That's a reduction of 26%. Yet its profit of $ 617 million is 396% more than it was 10 years ago.
So, staff who used to make the bank an average $146,000 operating income per year, now need to make the bank $340,000
operating income a year. Staff have been forced to become more than twice as profitable for their bank, but their pay
rates have only risen by 27% in those ten years.
The bank forces up its profits by setting sales targets for staff to meet. Those targets grow each year to match the
bank's greed for larger profits, but the number of people employed to meet those targets falls.
The number of Westpac branches has reduced in the last 10 years from 433 to 196 - a reduction of 54%.
This is despite Westpac's total assets growing from $21 billion in 1994 to $42 billion in 2004 - a growth of 100%.
Net profit after taxes for Westpac and Trustbank combined grew from $155 million to $617 million between 1995 and 2005 -
a growth of 396%.
Inflation
One of the pressures on interest rates is banks such as Westpac using performance pay targets to compel their staff to
sell higher and higher levels of debt to customers.
The Governor of the Reserve Bank has expressed concern on this matter. Westpac Chief Executive, Ann Sherry, simply
rejected the Governor's claims that banks are playing a role in fuelling inflation, suggesting the bank was simply
responding to customer demand.
Westpac Customer service workers are set a target of 8,575 points per year to meet performance standards. They get 10
points for opening a new account but they get an extra 25 points for selling a credit card. Westpac Customer Consultants
are required to get 13,305 points. They get 5 points for every $10,000 of home loans they sell and 5 points for every
$1,000 of personal lending.
Poor Work Practices
At union meetings at Westpac over the last year workers have complained of:
Being unable to take holidays at the same time as their children, or being asked to return from holidays because their
worksite was understaffed. Entire offices working late or missing morning and afternoon tea breaks without compensation.
High workload causing stress and pressure on families of workers. Workers coming to work because of workload pressures
despite being sick.
Bullying is not uncommon within Westpac. In one case a pregnant woman in the call centre was told she would have to make
up time after work if she went to a specialist appointment.
The husband called her union, Finsec, distressed at this behaviour. A Finsec organiser subsequently informed the call
centre team leader of their responsibilities under the Parental Leave Employment Act. The team leader then demanded that
the 20 week pregnant woman produce a doctor's certificate to prove that she was pregnant and that the specialist
appointment was related to the pregnancy.
Workers doing the late shift at the Phone Assist Call centres in Auckland and Wellington do not get taxis home despite
some of them not having cars and the fact that in Wellington there is no appropriate parking available anyway. Instead
Wellington staff have been taxied to the train station, despite the trains having finished running for the night.
At one branch, two staff members with outstanding performance records have gradually had their target review levels fall
from 5 (outstanding) to 1 (the lowest mark) because they worked in a small town with a saturated market. They were put
on performance improvement plans because of their low marks and threatened with transfer to another branch in a nearby
town.
Call centre workers are monitored so closely that when they make a three-minute call to the union they have been
threatened with having to make up that time after work at the end of the day. Call centre staff have also been spoken to
for taking more than three toilet breaks during the day, and if they spend more than 17 minutes not ready on the phone
during an eight-hour day, their quality assessment can be marked down thus potentially affecting their pay.
Poor work practices
The Report of the Roger Award also outlined how Westpac, along with all other big banks have used tax avoidance
strategies to borrow overseas, channel the money through NZ and re-lend it overseas. Through what the report described
as a "scam" these banks are paying as little as 6.7% tax instead of the official company rate of 33%. This information
came from Reserve Bank documents that were leaked to the media.
Reliable estimates of the tax owed by the "gang of four" are put at $NZ1.63 billion. The unexpected taxation windfall of
$500 million announced by Dr Cullen prior to the last election is believed by economic observers to come from the major
banks.
Partisan
Finally NZ Westpac customers of all political persuasions have to put up with the highly partisan and ideological
comments of Westpac Chief Economist, Brendon O'Donovan.
For all intents and purposes Mr O'Donovan acts as the economic cheerleader for the National Party and is a constant
critic of the economic policies of Labour, the Greens or any other of the Government support parties. There was blatant
politicking from Mr O'Donovan prior to the last election.
To give one example, Mr O'Donovan attacked Labour and Green's student loan policies pre the election, and was
subsequently forced to admit that some of the estimates that he was using to cost the scheme were extreme.
The then Education Minister Trevor Mallard, described O'Donovan's figures as "inflammatory, self-motivated garbage" and
stated that the bank had "very selfish reasons" for opposing the policy.
Mr O'Donovan has also attacked the Working for Families package and strongly advocated unsustainable tax cuts.
He has even recently attacked the Government's Buy Kiwi-Made programme that I am responsible for, before it has even
been designed.
Looking ahead
I hope that the Select Committee takes a good look at this Bill when it reaches them. The fact that an Act of Parliament
is needed to facilitate the incorporation of Westpac in New Zealand means that Westpac should have even more obligations
to be a good corporate citizen and a good employer. Its corporate behaviour will have to change on a number of fronts.
I urge the Select Committee not just to go through the motions of hearing submissions and reporting back the Bill. They
also have an obligation to determine whether this legislation will change the behaviour of this bank. And if it will
not, they should consider what amendments will be necessary to make sure that a Bank, relying on an Act of Parliament to
incorporate in New Zealand acts as a good corporate citizen and good employer.
ENDS