Labour fears sale of bank shares

Press, Volume CXI, Issue 32661, 17 July 1971, Page 2

Labour fears sale of bank shares

(New Zealand Press Association)

WELLINGTON, July 16.

Under the Bank of New Zealand Bill, the Minister of Finance (Mr Muldoon) could determine whether more shares in the bank should be made available and whom to sell them to, said Mr N. J. King (Lab., Birkenhead), in Parliament today.

The Minister wanted more and more power, and received it under this bill, said Mr King, speaking during the second-reading debate.

Mr H. C. Templeton (Nat, Awarua) said there had been many changes in the banking system over the years. This legislation would bring the Bank of New Zealand to parity with others in the country. Mr Templeton sa ; d it was surely reasonable to assist and strengthen a strong bank. The powers taken by the Minister in clause six were in line with those in clause 13 of the 1945 act, he said. Mr J. A. Walding (LabPalmerston North) said it had been stated that the directors of the bank had asked for the changes. He asked what reason they gave when they requested the clause.

If it was not intended to sell extra shares outside, Mr Walding asked, why would the Government not agree to a change saying the shares would be sold only to the Crown? “Not amendment” This was no simple measure amending the Bank of New Zealand Act, said the Leader of the Opposition (Mr Kirk). It was a new piece of legislation. The Government was not prepared to declare its intentions to convert the bank to a wholly privately-owned company. "This Government has constantly abhorred the principle of public ownership,” he said.

The bill gave discretion to the Minister of Finance and the National Party caucus to dispose of some of the shares in the bank. “We know that this Minister and the caucus would sell it tomorrow,” Mr Kirk said.

“The Government stands condemned by the very way in which it introduces this bill to the Statute Book. The Minister gave every indication when introducing this bill that it was an amendment bill.” Mr Muldoon: And it is. Mr Kirk continued, among Government interjections to the contrary, that every part of the original legislation that came into conflict with the original act was superseded by the bill before the House. Capital change Mr R. L. G. Talbot (Nat, South Canterbury) said there was nothing sinister about the bill; it was a sound measure to bring up to date the structure of the bank’s capital.

Mr T. M. McGuigan (LabLyttelton) said the shares of the bank were held in trust for the people of New Zealand. Earlier in the debate, Mr J. L. Hunt (Lab- New Lynn) said that 10 or 12 years ago the Australia-New Zealand Bank was 85 per cent New Zealand-owned, but now there were no New Zealand shares in it. Overseas interests had thus already taken over one bank, he said, and they were now getting ready to take over another.

If the bank were doing a poor job, why didn’t the Government denationalise it completely, he asked. The bank should be either fully nationalised or open to private enterprise, but by this bill the Government, if not opening the door, was unlatching one of the loeks. The bill would open the back door to private enterprise, he said, and some of that investment would “ob-

viously come from overseas.” Mr E. S, F. Holland (Nat, Riccarton) said the Opposition had wept crocodile tears about the powers' given to . the Minister' of Finance, but they were already there in one clause of the 1945 Bank of New Zealand Act Even more drastic powers were contained in another clause, Mr Holland said, by which the Minister was empowered to “do whatever he liked” with the bank's money. “Both clauses were written in by a Labour Government” he said. ' ’ The Deputy Leader of the Opposition (Mr Watt), said the Government-owned bank should be giving the lead in reducing interest rates and therefore reducing costs. If the Government was using the bank as it should, it would not be in line with the others, it would be in competition with them. Done by act The Minister of Education, Mr Taiboys, said: ‘’Wherever there have been changes to the structure of the bank, they have never been done by an amendment bill, but always by a Bank of New Zealand Act.” Mr Kirk was “skating or, ice that was too thfn to carry his argument." The debate was interrupted by the adjournment.