Brian Rudman

Brian Rudman is a Herald columnist looking at Auckland and national issues

Brian Rudman: Banks solicit praise for throwing scraps

58 comments

Brian Rudman writes that corporates are crowing over paltry donations to Christchurch while sitting on big earnings.

Unlike big banks, volunteers demand no glory for their contributions to the quake-relief effort. Photo / Getty Images
Unlike big banks, volunteers demand no glory for their contributions to the quake-relief effort. Photo / Getty Images

The way some holy men try to shame their followers into giving more than they can afford, by reading out a list of donations in church, is rather, shall we say, un-Christian.

On the other hand, if big commercial organisations want to pound their chests and alert us to their beneficence in times of emergency, where's the harm? Except, sometimes, to themselves.

In Monday's Herald, Westpac New Zealand's corporate affairs director, Sue Foley, rushed to correct a correspondent who had claimed Westpac had not been as generous as the other big banks in it's donation to the Christchurch quake appeal.

Most major banks, wrote Ms Foley, "including Westpac, stepped up to assist, giving $1 million each".

She added that Westpac had given a similar amount after the September quake and that "all the banks have been great, Westpac included".

My first thought was "how generous", which no doubt was the purpose of the letter - that, and trying to promote Westpac as having done better than its rivals.

But then a jaundiced Westpac customer of South Island origins rang to say how penny-pinching - he employed much more earthy Anglo-Saxon vocabulary - his banker had been. And how incredulous he was that they were skiting about their "generosity". Them and the other Aussie-owned banks which dominate the local banking scene.

After leafing through PricewaterhouseCoopers recent analysis of the major banks' results for the second half of the 2010 financial year, it was obvious he had a point.

Last year, the four Australian-owned NZ banks plus Kiwibank together amassed a profit before tax of $3.48 billion - a 36 per cent increase over the previous year's $2.56 billion.

Westpac's share of last year's bonanza was $822 million. The latter six months were particularly good, with profits leaping from $378 million in the first six months to $444 million in the second half.

Alongside these huge sums, the $2 million donation Westpac was anxious to promote suddenly sounds like loose change from the petty cash tin. Perhaps it's time for one of those holy men to start reading these numbers aloud and shaming the big bankers into opening up their safes instead.

Talking of opening up purses, Auckland Mayor Len Brown was in Wellington yesterday to discuss the Auckland Spatial Plan with the Cabinet committee on Auckland governance reforms. That was the official reason, but it's hard to believe that the subject on everyone's mind wasn't the clear signal from the Beehive that if Auckland wants to proceed with major infrastructural improvements, such as the inner-city rail loop, then we're on our own.

More alarming is the ideological pressure from the right, and from Wellington, to sell off regional assets such as the port company and the airport shares, and pay for these new infrastructure projects ourselves.

It's hardly a new tune. Just as it's hardly new to realise that the national politicians and bureaucrats are once more getting ready to rort Auckland out of its fair share of development funds.

The best analysis of this was by the Greens Transport Research Unit, which in early 2009 ploughed through years of Cabinet and Treasury documents and calculated that in the 15 years from June 1990, Aucklanders contributed $7.02 billion into central government coffers from fuel tax, road-user charges and motor vehicle fees but got back only $3.22 billion - less than half - in transport-related expenditure.

In the last three years of the last Labour Government, this imbalance finally began to be reversed, but still the shortfall to Auckland taxpayers between 1990 and 2008 was in the region of $3 billion.

Still, we can scream and yell about the injustice and unfairness of it all until the cows come home, but under the present National Administration it's not going extract an extra cent of investment for Auckland. But what this Government has given us, with the creation of the Super City structure, is the muscle to get on with the job ourselves.

Auckland is the biggest local authority in Australasia, with a $3 billion budget and $29 billion worth of assets. Among them are the port company, on the council books at $622.6 million, airport shares valued at $663 million, assorted term deposits and other diversified financial assets of $263 million and prime waterfront land stretching from Queen St around to the Harbour Bridge.

With the Government's books closed and Treasury officials on the prowl for projects to chop, the Auckland Council urgently needs a financial plan on how best to make the $29 billion asset base work for the development of Auckland.

There's pressure, from both outside and in, for cashing up assets such as the port and the airport and investing the proceeds. Others argue to carry on as now and live off the income of these investments.

Issuing development bonds is another option, as is reviving the regional fuel tax, which was widely backed but was cancelled before it could be implemented by the incoming National Government in late 2008.

There's a consensus in Auckland in favour of the inner-city rail loop. If we want it to proceed, it's time for us to flex our Super City muscles and come up with a plan for funding it someway else.

- NZ Herald

Have your say

We aim to have healthy debate. But we won't publish comments that abuse others. View commenting guidelines.

1200 characters left

Sort by
  • Oldest

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a3 at 24 Jul 2014 17:48:27 Processing Time: 686ms