The New Zealand government should buy Westpac’s banking operations in the country, says the leader of the Social Credit Party.
News recently broke that Westpac has hired Macquarie to help it determine whether to offload its New Zealand operations. The New Zealand unit earned more than $600 million last year, and includes banking, insurance and wealth management operations. With more than a million customers, Westpac is one of the Kiwi big four banks.
Chris Leitch, the leader of the Social Credit Party, wrote in a news release that the Kiwi government should snap up the unit if Westpac decides to sell.
“The potential sale of Westpac’s New Zealand banking operations provides a unique opportunity to return a significant slice of the country’s banking business to Kiwi ownership,” Leitch wrote. “The government should commence negotiations with Westpac’s Australian owners to purchase the bank’s New Zealand arm with a view to integrating it into Kiwibank.”
Such a deal would make the merged entity “a major player in the banking sector, second only to ANZ,” Leitch wrote.
“Westpac should not be sold to another overseas owner, nor be floated on the share market,” he wrote. “Further speculative activity, whether from local or foreign based sources, rather than investment in productive enterprise, should be discouraged.”
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Leitch said that the New Zealand government’s transactional banking services, credit and debit card services, and payment services are already done through Westpac – so the bank’s purchase by the government would relieve taxpayers of millions of dollars in taxpayer-funded fees. He said the government could “easily” pay for the purchase by directing the Reserve Bank to cancel its $28 billion “Funding for Lending” program. Leitch said the program “has hardly been touched by the commercial banks,” and that money could be better used to purchase Westpac’s NZ operations.
“The country could then own Westpac at no cost to taxpayers, interest free and debt free, and the $1 billion annual profit could be spent by the government on things like providing more staffing and other resources for our overstretched hospital emergency departments,” Leitch wrote. “It would also mean that the annual outflow of profits would no longer be a burden on overseas funds earned by our productive export sector.
“That profit would stay in New Zealand, providing ongoing benefit to our economy instead of somebody else’s,” he wrote.