Category Archives: Manifesto

Party policy

Who Owns the Big Four Australian Banks?

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You will know that New Zealand banking system is dominated by four large Australian banks, but did you know who owns them? Well I did a bit of a search and found this website called Spankyourbank. There you can look at http://www.spankyourbank.com.au/who-owns-how-much-of-our-banks  where it gives the ownership chart.

Four companies dominate. We find that between them, the four, HSBC, JP Morgan, NAB and Citigroup own 49% of ANZ, 34% of NAB, 43% of Westpac, 38% of the Bank of Queensland, 37 % of the Commonwealth Bank and 28% of the Bendigo Bank.

So while we worry that the big four in New Zealand are owned in Australia, it is not quite true. They are owned by UK and US based banks.

For example BNZ, purchased by National Australia Bank (NAB) in 1992, has the following  five largest shareholders:

HSBC Custody Nominees                  16.9%

J P Morgan Nominees                       12.2%

National Nominees                           11.5%

Citicorp Nominees                            4.6%

Cogent Nominees                            1.9%
HSBC has 13.6% of the Commonwealth Bank, which owns ASB, 17.5% of ANZ as well.

Now who is HSBC? Well they are so big that when they were fined last December a record $1.9 billion for money laundering, they were not just too big to fail but too big to jail. While HSBC has been caught laundering tons of cash for drug cartels and alleged terrorists, yet no bank officials will be prosecuted or imprisoned. An editorial in the NY Times http://www.nytimes.com/2012/12/12/opinion/hsbc-too-big-to-indict.html?_r=0 on 11 Dec 2012 said it was a dark day for the rule of law.

UnknownThey were sponsors of the Sevens Rugby Tournament and no questions were apparently asked.

We launch a petition for Chicago Plan and against bank bailouts

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Petition on Banking Reform 

Petition extra information  (This is the all in one information a backed A4, which condenses the three which follow into one)

Stop-the-banks-from-stealing-your-money

The Chicago Plan Revisited summary

Who owns the Australian Banks

(Click on the above links for the petition form, the sheet of explanation you can hand out or sign the online petition)

The online petition is at http://www.avaaz.org/en/petition/Reform_the_banking_system_so_that_no_more_bailouts_are_ever_needed/?cHHSRcb. It has kindly been created by one of our supporters, Lewis Verdyn.

Remember online petitions don’t count in the actual numbers for the NZ Parliament as many will come from overseas, but they are noted in the cover sheet.

__________________________________________________________________________

Following the letter from the Minister of Finance, Hon Bill English regarding his opinions of The Chicago Plan Revisited, and where he said they were working on Open Bank Resolution, we have decided to launch a petition. We decided it was best to ask for a Parliamentary Enquiry so that New Zealand could take initiative to implement The Chicago Plan Revisited.

We don’t want either taxpayers or bank customers to have to bailout the banks in the event of a bank failure. We believe banks should be stable in the first place. That will take radical monetary reform and this has to be done internationally and simultaneously. Our petition is attached, along with a sheet of explanation.

Because we are liaising and working with other organisations wanting the same thing, we have created a Facebook page at http://www.facebook.com/pages/Petition-for-a-Parliamentary-Enquiry-into-making-banks-stable/420764948002065. Please like it and contribute to the discussion and information sharing there.

We also have an online petition (although it isn’t officially counted, the Parliamentary Office says to mention the number of online signatures we get on the cover page.) These signatures of course will come from all over the world. It is here

Also if you would like to see a 35 minute explanation of The Chicago Plan Revisited by one of the authors, Dr Michael Kumhof, you might like to visit http://youtube.googleapis.com/v/YnAtHbDptj8&hl=en_US&fs=1&

Minister of Finance’s reply to our letter on The Chicago Plan Revisited

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You will recall we wrote to the Minister of Finance on 18 December regarding the The Chicago Plan Revisited. We have now received a reply. It seems the Government no longer wants the taxpayer to bail a bank out in the event of failure, so it is setting in place this thing called the Open Bank Resolution (they say by 30 June) This is a process in which in the event of a bank failure, banks will be able to give your deposits a ‘haircut’. Any bank creditor is vulnerable. But burdening savers with this risk is no more desirable than burdening taxpayers. We want banks fundamentally structurally reformed so that there is no risk of a run on the bank. You see while banks have the power to create the money supply, if everyone came to the bank for their money at once there wouldn’t be enough for everyone.

Anyway we are contemplating our next step. We would far prefer the The Chicago Plan Revisited and want to make it work. It would have to be implemented internationally simultaneously and New Zealand should play its part in making this happen to protect us from financial contagion. Here is the letter

1 February 2013

Dear Deirdre Kent and Phil Stevens,

Thank you for your email of 18 December 2012 regarding the recent International Monetary Fund (IMF) paper on the ‘Chicago Plan’ by Jaromir Benes and Michael Kumhof.

Their paper has stimulated significant debate among economists. While some economists have supported the arguments made in the paper, others have questioned the desirability and the practicality of its proposals. For example, I refer you to a recent paper by Adair Turner, chairman of the Financial Services Authority in the United Kingdom, which discussed the Chicago Plan (http://www.faa.gov.uk/static/pubs/speeches/1102-at.pdf). Turner argued that even if implementing the plan was practical, it may not be ideal, given the role of private banks in risk pooling, maturity transformation and their ability to allow consumers to smooth their consumption through their lifetime.

Despite the issues relating to the feasibility of the plan, many of its aims are consistent with the Government’s policy objectives. As confirmed in the recent Half Year Economic and Fiscal Policy Update (HYEFPU), the Government is committed to reducing net public debt to below 20% of Gross Domestic Product by 2020. In addition the Policy Targets Agreement (PTA) signed with the new Governor of the Reserve Bank includes a commitment to take account of the efficiency and soundness of the financial system when setting monetary policy (http://rbnz.govt.nz/monpol/pta/4944840.html). The RBNZ Governor, Graham Wheeler’s recent speech also notes the Reserve Bank’s current work on developing macro-prudential policy instruments and an Open Bank Resolution system to maintain a stable financial system and minimise the damage to the wider economy in the event of a bank failure (http://rbnz.govt.nz/speeches/5005204.html).

Thank you for taking the time to write. I hope you have found my comments helpful.

 

Yours sincerely,

 

Hon Bill English

Minister of Finance

 

Change Tax Policy and Control Banks for Affordable Housing, says New Economics Party

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January 31, 2013

Media Statement

To get affordable housing we need a tax policy which favours investment in productive enterprises not housing, says the New Economics Party.

“If we don’t control capital coming into New Zealand and then don’t stop it going into housing through our tax policy, it’s no wonder we have a housing bubble in Auckland”, said Deirdre Kent, spokesperson for the New Economics Party. “And if we let the banks lend 100% on housing, we are asking for trouble.”

Freeing up land and changing the Resource Management Act is not working, she said.

“Banks are pushing money onto buyers and we effectively have a bubble which will eventually collapse. Wealthy Chinese are buying here to get their money out of China where they are clamping down on corruption. A lot goes into real estate.”

No progress will be made towards affordable housing until land tenure is separated from buildings, according to the New Economics Party. Spokesperson Deirdre Kent said “Until we impose a full ground rent – which can replace income tax as a source of revenue for Government – we won’t get any progress.”

She said that when homeowners just have to pay the price of the building, the price of the home is halved. “In Auckland where land is on average 60% of the property price, the price would drop even further if a full ground rent was imposed.”

“When property prices rise, it is almost solely because the price of land rises. Generally, the price of the house doesn’t rise. When the public captures the windfall from rising land prices instead of the banks and the private owners house prices will be finally contained,” she said.

She said some Auckland leasehold land fetched a ground rent of 5% of land value at auction and this money should really be public money because it is the public who has paid for the services to that land in roads, schools, sewers and businesses.

“Others have recently been proposing solutions to affordable housing but they are just tinkering around the edges.”

Hordur Torfason, democracy activist from Iceland to visit New Zealand

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New Economics Newsletter Jan 26-2013

1.  Hordor Torfason is coming to New ZealandYes we know there is a permaculture hui in Taranaki 9-11 March and then there is WOMAD after it. But here is something really relevant to our policy we will support. Hordor Torfason is coming to New Zealand. Never heard of him? I hadn’t either. Well he led the protestors in Iceland and forced the whole government to resign. They nationalised the banks. They pushed the losses on to the bondholders not the public. Paul Krugman said “A funny thing happened on the way to economic Armageddon: Iceland’s very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.”Not only did Paul Krugman approved but the IMF changed its tune and said the “decision not to make taxpayers liable for bank losses was right”.http://www.washingtonsblog.com/2012/08/top-economists-iceland-did-it-right-everyone-else-is-doing-it-wrong.html. Krugman also says:

A funny thing happened on the way to economic Armageddon: Iceland’s very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.

The size of the problem was huge. Banks had defaulted on $85 billion. They arrested nine bankers and the former Prime Minister. 200 criminal charges were laid on the bankers, many of whom had fled the country.

Anyway here’s what you can do. Go to the Facebook page http://www.facebook.com/HordurTorfasonNzTour?fref=ts where you can link to all those sites, including to the pledgeme site where you can support his tour. He will be in Auckland on March 18 and 19, Wellington on March 20, Hawke’s Bay on March 21st, Golden Bay on March 23, Nelson on March 24th, Christchurch March 25-26 and Dunedin 27-28.Hordur Torfason, we understand, is primarily a democracy advocate. We are undertaking as a party to prepare two reports to brief him, one on democracy in NZ, and one on banking in NZ. If you would like to participate in preparing these briefs, or have ideas for people we must consult, please email Deirdre at deirdre.kent@gmail.com or phone 06 364 7779 or 021 728 852.Please also help in the publicity for this event through Facebook, twitter, google +1 etc. You can email lisa.er@the awareness party if you can think of an organisation which should be involved in publicity. Thanks!2.There is an Economics of Happiness conference between 15-17 March to be held in Byron Bay, 772 km north of Sydney. Cost $250 AUD plus accommodation. See http://www.theeconomicsofhappiness.org/3.If you would like to participate in developing policy you will need a special yammer email, which can be generated by Deck Hazen. Please email Deck.hazen@gmail.com to let him know you are interested. This is an excellent site.4.Permaculture in NZ Annual Hui in Taranaki March 9-11 2013

Taranaki is hosting this year’s national Permaculture Hui, and they picked the March date so you can stay on after the hui to take in some of the post hui events. Get together with people of like mind and find out what is happening in the permaculture community.

Accommodation includes cabins (limited), dormitories, marae-style, and BYO camping, with a maximum capacity of 250 people. There are other accommodation options nearby.

The theme of the Hui is “Upskilling“, with an emphasis on practical workshops. There will be a wide range of talks and activities, including a strong matauranga Maori presence. We aim to appeal to both the novice and the seasoned permaculture practitioner. There will also be lots of connecting with people, networking, and having fun!

 

 

 
 

 

 

The challenge of sharing the use of the commons by tax policy

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Recently a friend who was writing a document for an organisation who is planning a new New Zealand asked me for a brief contribution on the commons.  Here is what I sent him:

Nature has provided the land we live on. This is the Commons we share by birth and everyone alive should have an equal right to access their share of the Commons. But everyone can’t occupy the same piece of land. Those, therefore, who use the best land should compensate the rest of us for the privilege they enjoy.

Henry George, Pierre-Joseph Proudon, Silvio Gesell and even Winston Churchill argued that work should be untaxed and the monopoly use of land should be taxed. The rise in land value as a result of government built infrastructure, the arrival of shops and businesses and organisations should be publicly captured. This income should be shared by all levels of government and some redistributed as a Citizens Dividend. The tax on land value is simple and cannot be evaded as you can’t hide land. The problem these days is finding a politically acceptable method of doing this. Property owners already pay a mortgage and rates and won’t accept a third payment on their land. Moreover it is the banks who capture a significant part of the rise in land value. Yet we must face this political challenge. The gap between rich and poor will keep widenening when we have a tax policy which favours landowners who reap unearned profit.

Other parts of the commons should also be shared. Private enterprise should not include private ownership of the elements of life. Everyone by right should have access to land, water, airwaves, fisheries, minerals, electromagnetic spectrum, any public utility such as a port, airport or the monopolistic rights to reticulate wires, pipes, roads and rails.

The principle is that we should pay for what we hold or take but not for what we do or make.

Change Tax Policy and Control Banks for Affordable Housing, says New Economics Party

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Change Tax Policy and Control Banks for Affordable Housing, says New Economics Party

January 31, 2013

Change Tax Policy and Control Banks for Affordable Housing, says New Economics Party

To get affordable housing we need a tax policy which favours investment in productive enterprises not housing, says the New Economics Party.

“If we don’t control capital coming into New Zealand and then don’t stop it going into housing through our tax policy, it’s no wonder we have a housing bubble in Auckland”, said Deirdre Kent, spokesperson for the New Economics Party. “And if we let the banks lend 100% on housing, we are asking for trouble.”

Freeing up land and changing the Resource Management Act is not working, she said.

“Banks are pushing money onto buyers and we effectively have a bubble which will eventually collapse. Wealthy Chinese are buying here to get their money out of China where they are clamping down on corruption. A lot goes into real estate.

No progress will be made towards affordable housing until land tenure is separated from buildings, according to the New Economics Party. Spokesperson Deirdre Kent said “Until we (move from income tax to imposing a full ground rent) impose a full ground rent – which can replace income tax as a source of revenue for Government – we won’t get any progress. “

She said that when homeowners just have to pay the price of the building, the price of the home is halved. “In Auckland where land is on average 60% of the property price, the price would drop even further if a full ground rent was imposed.”

“When property prices rise, it is almost solely because the price of land rises. Generally, the price of the house doesn’t rise. When the public captures the windfall from rising land prices instead of the banks and the private owners house prices will be finally contained,” she said.

She said some Auckland leasehold land fetched a ground rent of 5% at auction and this money should really be public money because it is the public who has paid for the services to that land in roads, schools, sewers and businesses.

“Others have recently been proposing solutions to affordable housing but they are just tinkering around the edges.”

For further comment phone Deirdre Kent 06 364 7779 or 021 728 852.