With current polls showing NZ First would hold the balance of power after the next election and on top of a series of statements and interviews with Winston Peters the party’s banking policy is now critical.
At the weekend, during the party’s conference, Peters made it clear that a review of the Reserve Bank Act was at the top of the party’s potential list of bottom lines.
Since then Peters has repeated the priority that he is placing on the Reserve Bank in a whole series of interviews.
Officials at the Bank are taking his comments seriously, and there is growing interest within political circles at trying to understand exactly what NZ First wants.
Fletcher Tabuteau, a former economics teacher and lecturer, is the party’s commerce spokesperson.
He is ranked fourth in the NZ First caucus but is known to have a direct line to Peters.
He usually “subs” for Peters at the Finance and Expenditure Committee and is increasingly being recognised in Wellington not only as a key figure within the NZ First caucus but also the go-to person on the detail of economic and finance policy.
Tabuteau affirms the party’s intention to review the Reserve Bank Act.
But he says that even so, control of inflation would remain the number one priority.
“Price stability is paramount, and businesses need to see certainty going forward,” he told POLITIK.
He refers to Winston Peters failed Private Members’ Bill of 2013 which would amend the Reserve Bank Act to broaden the primary function of the Bank to include other macro-economic factors such as the rate of growth, export growth, the value of the dollar, and employment as well as price stability.
Tabuteau concedes that the Bill is a “broad brush stroke” but says that when the Governor changes the Official Cash Rate, he should consider the effect it will have on our export industries and on employment.
“Exporters are just being shot down left, right and centre at the moment,” he says.
But he supports the independence of the Bank.
“Let’s be very clear here, we don’t want politicians to be involved in the decision-making process.
“We want to empower the decision-making authority to be fuller in their considerations.”
Tabuteau envisages a review which would be led by the Government but which would involve independent experts and advisors.
But reviews would not stop with the Reserve Bank, the party convention last weekend supported a call for an investigation into the four Australian-owned trading banks.
Tabuteau says they are not geared up to support the New Zealand economy.
“They are geared up to extract margin from the New Zealand economy.”
He gives as an example the way Westpac has withdrawn banking services from many regional economies.
He says the Australian banks have made $2.5 billion profit in New Zealand over the past year.
“Yes, a bank should be able to make a profit.
“That’s the nature of the business but have they gone too far?”
And not surprisingly NZ First wants to see the Government’s banking handled not by Westpac but by Kiwibank and would want capital resources provided to Kiwibank so it could invest in the technology it would need to handle such an account.
The party is also about to start a campaign over credit card inter-change fees which are effectively a large part of the per centage fee that a merchant pays their bank on every credit card transaction.
The fees have been investigated by the Commerce Commission who in 2013 reported that after negotiation with Visa and Mastercard the Commission estimated merchants had saved $70 – $80 million in fees between 2010 and 2013.
But the same report also said that there was evidence that the fees were beginning to rise again.
And it concluded that while some merchants were paying lower fees, they were generally larger merchants who had been able to negotiate lower rates with the card companies.
Otherwise “many (merchants) are paying higher fees for accepting credit cards than they were in 2009,” the report said.
The Commission washed its hands of the matter hinting that the issue would be best solved by Government regulation.
The Government has not acted and an NZ First request to the Commerce Minister to take action also got nowhere.
It’s early days yet, but we are beginning to see the broad outline of what New Zealand First might take into any Government formation talks.
The banking agenda is likely to be at the top of that agenda.