Prime Minister Christopher Luxon announces shake-up of banking sector to improve competition at post-Cabinet press conference
Prime Minister Christopher Luxon has announced new moves to improve competition in the banking sector, following a Commerce Commission investigation.
He and Finance Minister Nicola Willis spoke at the weekly post-Cabinet press conference at the Beehive about the Commerce Commission’s report on banking competition, which found the sector wasn’t competitive enough.
Luxon said the commission found banks focused on retaining market share, which didn’t drive better prices for consumers. “Frankly, that is not good enough.”
Extra police target
Scott Palmer
On the potential for the 500 extra police target by the end of next year not being hit, Luxon instead focused on how the Government was ambitious.
"We're going to do everything we can to work towards achieving that goal."
"Yeah I do," Luxon said when asked if he believed the target was still possible.
Poll shows drop for National
Scott Palmer
On today's Taxpayers' Union/Curia poll that showed a drop for National, Luxon said there would be a range of polls results on any given day.
He rejected the suggestion it was a response to the party's position on the Treaty Principles Bill in light of the recent nationwide hīkoi.
Luxon on Syria
Scott Palmer
On developments in Syria, Luxon said there could be one or two New Zealanders in the country and reinforced the no-travel recommendation.
Bootcamps
Scott Palmer
On bootcamp participants absconding incidents, Luxon said the Government remained supportive of the pilot, despite the offending that had been linked to the absconding incidents.
Cook Strait ferries
Scott Palmer
On ferries, Luxon wouldn't answer any questions about what Cabinet might have agreed today, saying announcements would be made shortly.
NZ First leader Winston Peters had previously said the Government would make a decision by December 11, which is this Wednesday.
Willis switching from ANZ
Scott Palmer
Willis said she was in the process of switching from banking with ANZ.
However, she was quick to say it wasn't appropriate for her as Finance Minister to direct people to bank with any particular bank.
Willis attacks 'complacent' big banks
Scott Palmer
"We're completely prepared to use them," Willis said of the Government's available tools to address big banks that didn't adapt following the Commerce Commission's report.
Willis said the big banks had become “complacent”.
“It’s this simple; the banks need to get on and deliver better and more affordable services for New Zealanders.”
Failure to act could result in government regulation, she warned.
Willis argued Kiwis liked how Kiwibank's profits were re-invested in New Zealand, unlike the other major banks.
"They should have nothing to fear from competition," Willis said of the big banks.
Big banks 'on notice' - Willis
Scott Palmer
"Today we are putting the big banks on notice," Willis said, saying the Government expected them to act on the report's findings.
She said if they didn't act now, the Government would address it for them.
Taking questions from journalists, Willis believed Kiwibank could be a "real disruptor" to nip at the heels of the big banks that were complacent, she claimed when asked if Kiwibank could ever truly compete.
Luxon wouldn't be drawn on whether National would campaign on facilitating an IPO for Kiwibank in the next term, saying that was a bit premature.
Govt not considering Kiwibank sell-off
Scott Palmer
Willis said the Government was not considering selling off its Kiwibank shares.
She noted a future government could consider a public offering of shares but that wouldn't happen this term.
If a public offering isn't approved at a later date, an exit option could allow investors to sell their shares back to the Crown at an independently assessed "fair" value, Willis said.
Luxon calls to 'disrupt the status quo'
Scott Palmer
Luxon said all 14 report recommendations would be progressed.
"In short, we want to disrupt the status quo."
Luxon said Cabinet agreed to inject capital into Kiwibank to make it more competitive, saying it could need up to $500 million.
"We need to level the playing field.
"I want to see banks fighting tooth and nail for Kiwi customers."
Willis echoed Luxon, calling for more competition and innovation from the big banks.
Kiwi Group Capital and Treasury have been directed to talk to potential investors regarding a possible investment of up to $500m.
Banking competition
Scott Palmer
Prime Minister Christopher Luxon and Finance Minister Nicola Willis are speaking on the Commerce Commission's report on banking competition, which found the sector wasn't competitive enough.
Luxon said the commission found banks focused on retaining market share, which didn't drive better prices for consumers. "Frankly, that is not good enough."
Luxon, Willis to front weekly post-Cabinet press conference
Scott Palmer
Prime Minister Christopher Luxon and Finance Minister Nicola Willis are expected to front the weekly post-Cabinet press conference at 4pm.
A livestream of the press conference will be found above.
Luxon said all 14 report recommendations would be progressed.
”In short, we want to disrupt the status quo.”
Willis said the big banks had become “complacent”.
“It’s this simple; the banks need to get on and deliver better and more affordable services for New Zealanders.”
Failure to act could result in government regulation, she warned.
It comes at the start of the final sitting bloc of the year for Parliament, with the Government still needing to tick off key items from its quarter-four action plan.
Among them is passing the Fast-track Approvals Bill, which will allow projects of regional or national significance to be eligible for streamlined approval. That still needs to go through its third reading in the House. The legislation reversing the ban on new offshore oil and gas exploration also needs to go through the final stage.
Luxon and Willis also fielded questions about their plans to replace the Interislander Cook Strait ferries. Deputy Prime Minister Winston Peters has said the deadline for that decision is Wednesday, meaning an announcement could be imminent.
Willis revealed last December that the new coalition Government would halt plans to purchase two new mega ferries to replace the current fleet. That came amid concerns by the new ministers about a significant blowout in the project’s cost.
Transport Minister Simeon Brown has told the Herald: “The Deputy Prime Minister has made clear there’s a timeframe we’re working towards.”
Asked whether that meant the ferry decision would go to Cabinet today, Brown said: “It’s a timeframe we’re working towards and obviously it’s being led by the shareholding ministers.”
Brown confirmed the public could expect an announcement by Wednesday.
“We’re working through that at pace.”
The Prime Minister was also asked about the evolving situation in Syria, where rebel forces have overthrown the regime led by Bashar al-Assad. It was reported this morning that the former Syrian President had fled to Russia. Iran and Russia, two of al-Assad’s supporters, did not provide military support during the rebel offensive.
The al-Assad family has ruled Syria for more than 50 years, creating further uncertainty for a region already dealing with the war between Hamas and Israel. Israel on Monday moved beyond a de-militarised zone on its border with Syria for the first time since 1973, the New York Times reported.
Foreign Affairs Minister Winston Peters on Monday posted on X (formerly Twitter) that New Zealand was watching developments closely following the fall of al-Assad’s regime.
“This was a regime that perpetrated significant human rights abuses, including repeated chemical weapons attacks, against its own people for many years,” Peters said.
“Now we need to see a peaceful transition with civilians protected and UN Security Council resolutions upheld. This is critical for moving towards a sustainable and comprehensive political solution.”