The inquiry by the Labour Party, the Greens and the Progressives into banks' lending practices has been variously scorned as a farce, a stunt and a gimmick. That belittles it. Such initiatives should be welcomed. Opposition parties often fall into the trap of merely rubbishing any policy that emanates from
the Beehive. They need to do more than that. The formulation of constructive alternative policies and inquiries into issues that the government has sidestepped are worthwhile avenues.
It needs to be said, of course, that this inquiry's focus on why floating mortgage rates are so high compared with the official cash rate is unlikely to lead to much. This territory has been well traversed. However, the Government offered an opening when National, Act and Maori Party MPs on Parliament's finance and expenditure select committee blocked a formal inquiry, despite concerns voiced by Reserve Bank Governor Alan Bollard.
The inquiry's instigators know also that this subject taps a populist vein. The banks make excellent whipping boys in the current economic climate. Notwithstanding that, the actual subject matter will be extremely dry. That will limit the potential for significant points-scoring.
Stunts, by their nature, usually require little endeavour. That will not be the case with this inquiry. It will take much organising, if only because there is no power to call witnesses. Much effort will have to go into cajoling the likes of the Australian-owned banks to play ball. The inquiry presents them with a particular problem. As Progressives MP Jim Anderton has noted, failure to front would speak for itself.
If the banks elect to absent themselves or to play only a limited part, this exercise could fall very flat. That would be a shame. There should be some reward for thinking outside the square, and some encouragement for fostering debate in this manner.
