In the blue corner

Last week the National Party, through our finance spokesperson Nicola Willis, wrote to Parliament’s finance and expenditure committee asking for an inquiry into the banking sector.

New Zealanders are doing it tough financially, and unfortunately, I do not see those pressures easing in the short to medium term.

High inflation, and the subsequent lifting of interest rates, are largely to do with poor fiscal management by Grant Robertson and this Labour Government.

The outrageous disregard for taxpayers’ money is unforgivable.

Labour have overseen the Official Cash Rate lift to 4.75% whilst inflation remains staunch above 7%, meaning groceries, rent, mortgages and all the other necessities climb to unaffordable rates.

As Kiwis are enduring financial pain, we are contemplating potential ways to support them during this critical period.

Our belief is that having a parliamentary select committee investigate the banking industry and its profitability could alleviate some of the burdens on household budgets. Data recently published by the Reserve Bank suggests net interest margins – the gap between the interest paid on deposits and charged on lending by retail banks – appear to have risen across the retail banking sector in the last year.

That mismatch shows that there is a role for the finance and expenditure committee to play in investigating why this gap exists, and what central Government policy can do to alleviate the costs on households.

The state of competition in our banking sector is also worth looking into as part of the inquiry.

We have had similar inquiries into petrol companies and supermarkets recently, and there is no reason why we cannot do the same for competition in banks.

We need to understand what barriers might be halting new entrants into our market so that, if required, we can remove them to allow more banks to service New Zealanders and drive prices down.

Parliament needs to collectively look at all the ways we can help New Zealander’s who have had to tighten their budgets due to the cost-of-living crisis.

An inquiry by the finance and expenditure committee will undoubtedly help us to get some answers into why banks are making massive profits, whilst Kiwis are going backwards.

Now is the right time to do this because the longer we take to act, the worse it will be for New Zealanders.