Dialogue: Gordon McLauchlan

A bank with a bit of interest in the suckers called clients


Last year, Alliance leader Jim Anderton said something about the possibility of using New Zealand Post depots as agencies for a national people's bank. You could feel the nation whinnying like a panicky horse, and I must say I cringed a bit as well, even though I don't carry ideological baggage.

Oh, God, we all thought, not government banking again. Well, several months on, I think the idea has merit.

Your slick modern young finance joker trembles into trauma at the merest thought of a people's bank because he was taught about the same time he was potty-trained that government-owned anything is economically and socially repellent.

But let's clear our minds and viscera from the brainwashing of the past 20 years and look at the issue clearly.

Modern banks are not really interested in savings, they're interested in what they call product, something that makes them money quickly off our money. I have no problem with that because borrowing and lending are the fuel of business in a capitalist country.

But it's left a service gap. The theory is that deregulating the finance industry means competition will push some business entity into filling the gap as banks get bigger and bigger and less and less interested in the personal saver.

Sounds okay, and it has worked in some industry sectors. The big accountancy and law firms have long since lost interest in small businesses and sole traders, but underneath them many accountants and lawyers have set themselves up as small firms and sole traders to fill this service gap.

My personal involvement over the past couple of months with what used to be the Big Five and is now the Only Five has proved to my satisfaction that individuals and small operators are an impediment to the real business that banks want to do.

The announcement this week by Westpac that customers are to be charged $2 for paying their bills on time seems to confirm what most people think - the banks are multinationals who have tapped the sides of their noses, winked their avaricious eyes and tacitly conspired to make the little suckers pay for the inconvenience of having them as clients.

So the ethos of the modern bank is not to encourage people to save but to encourage them to spend.

I regaled you at length a few weeks ago about the $8000 cheque made out to me that went missing for a couple of weeks, and the bank at fault which offered no explanation, apology or recompense for temporarily losing my money. This week I received a letter from a magazine company in Sydney saying the Bank of New Zealand in Wellington had informed them that a subscription cheque I sent them for $191 has been lost. Would I cancel this cheque and submit another to the same value?

How did the magazine company and the Bank of New Zealand know the cheque had been lost, without either me or my bank knowing? You don't have to be an MBA to guess the bank lost it. So should I cancel the cheque and carry the $15 cancellation fee? We'll see about that. Any word from the Bank of New Zealand? What do you think?

So back to Jim Anderton's idea. Let's not call it the people's bank, a name redolent of stomping communist compulsion, let's call it simply the New Zealand Capital Savings Bank (NZCSB).

Development capital is scarce in our country and one reason is that we are too prodigal with our cash. We need to save more, especially with the idea of providing for retirement. The NZCSB could have cheque and savings accounts with ATM cards, but also deposit accounts, which generously reward customers for depositing money regularly and leaving it in for long periods. Thus the long-term interests of the country would be served while the banking industry looked after its own interests, which are essentially short-term.

I'm not suggesting we make a maxiebradford* but Mr Anderton's idea deserves study. It may prove productive both for the individual who wants to save and the country that needs the capital from small savings. Perhaps such a savings bank could be set up with a board of directors partly appointed by the Government and partly elected by depositors.

Footnote: Credit where credit's due. During my banking imbroglios of the past few weeks, one of the three banks I do business with, the National Bank, has been unfailingly courteous and helpful.

* A decision made with imprudent haste on ideological grounds.