21 July 2009
Media Statement

Banks have questions to answer

Banks are charging interest rates in New Zealand that are higher than the same banks charge in Australia, Progressive Wigram MP Jim Anderton says.

He is supporting a cross-party inquiry into bank profits, because he says the banks have questions to answer about why there is a difference in the rates they charge.

“Overseas-owned banks took $11.7 billion out of New Zealand last year in interest and profits. That’s more than the entire sum collected in GST revenue. The amount they have been paying themselves has increased rapidly over the last three or four years.

“Interest rates charged by the overseas banks are especially affecting farmers.

“Total farm debt at the moment is around $43 billion. At farm lending rates of 13-14 per cent, that means our farmers are having to pay $5.5-6 billion a year in interest alone to the Australian banks.

“Every one per cent of interest charged represents $450 million off the bottom line of New Zealand’s farms.

“The Australian banks charge interest on unsecured loans of 17.95%, compared to 16.9% charged by Kiwibank.

“Interest on a standard Westpac credit card is 19.45%. In Australia, the comparable interest rate charged on a standard Westpac card is 17.74%. Australia has a higher official cash rate than we do. Kiwibank is able to charge 12.9% on its standard credit cards.

“An inquiry will help to establish why Aussie banks charge us more than they charge Australians.”

ENDS

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