Govt ‘interference' in bank alleged

Press, Volume CXIII, Issue 33294, 3 August 1973, Page 14

Govt ‘interference ' in bank alleged

Vew Zealand Preet AMOciatlon,

WELLINGTON, August 2.

New Zealand was getting near a police State when a “Minister’s man” could investigate private accounts in the Bank of New Zealand, the Opposition spokesman on finance, Mr Muldoon, said in Parliament tonight.

He was speaking during the committee stages of the Reserve Bank of New Zealand Amendment Bill, which says there will be a concurrent appointment of a director to the boards of both the Reserve Bank and the Bank of New Zealand.

Mr Muldoon said the “Minister’s man” would be on the board of the Bank of New Zealand, and would look into the files of the customers of that bank, and report back to the Minister.

The first Labour Government had not interfered in the day-to-day management of the bank, but the new Labour Government was going the whole distance, he said.

Mr B. E. Taiboys (Nat., Wallace) asked why the B.N.Z. could not meet unless the Reserve Bank director was present. “If it is not a reflection on the other members of the bank it is a reflection on the Minister himself," Mr Taiboys said.

Before the election the Labour Party had said the bank would be totally responsible for its day-to-day running. But now it had brought in a bill to make! the Minister totally responsible, Mr Taiboys said. I TEN MEETINGS The Minister of Finance} (Mr Rowling) said the execu-. tive of the Reserve Bank had met only 10 times in 10 years. He accused Mr Muldoon and Mr Taiboys of attacking the integrity of the directors of both the Reserve Bank and the Bank of New Zealand. There was adequate provision in the bill for the executive to meet without the director of the Reserve Bank being present, Mr Rowlings said. He had introduced the amendment because he wanted a wider range of financial opinions. There would be no “Minister’s man” on the executive committee.

Mr Rowling said that if the Government had wanted to “plant” a bank director it could have done so without passing an act of Parliament. Directors had long been appointed by the Minister of Finance. Mr C. C. A. McLachlan (Nat., Rakaia) said the Opposition would end the debate if Mr Rowling would simply state why he wanted to appoint a "Minister's man.” Clients of the four other trading banks would suffer if) the B.N.Z. were given an advantage by this bill.

Mr F. D. O’Flynn (Lab., Kapiti) said the Opposition had destroyed its argument by exaggeration. Any Government could have indulged in "snooping” within the State-owned banks had it wanted to do so. REPORTING METHOD Mr J. L. Hunt (Lab., New Lynn) said the director would not report individually to the Minister. The executive would report. Mr Muldoon: “If he’s not

■going to report, what’s the 'good of having him?” Mr D. S. Thomson (Nat., | Stratford) said the joint director would have to be a i schizophrenic to carry out his twin duties. Mr Rowling said he had received no letters opposing I the measure, and this hardly i supported the Opposition’s icase.

The Government wanted the executive to include men with a “wide range of experience,” and this being so, it was only logical that it should include people with wide experience of the tradling banks. Mr H. J. Walker (Nat., Papanui) said the appointIment of a director would ' have an adverse effect on the ■ Bank of New Zealand, and I the clients of the bank could I not but be concerned about the appointment. "What is the Minister’s in- ■ tention as far as other banks .are concerned?” he asked. "Why pick on the Bank of New Zealand? Is the Government going to appoint directors to other banking in- | stitutions?”

The Minister of Defence (Mr Faulkner) condemned

what he called "the serious attacks on the Bank of New Zealand.” No-one would be “snooping” on anyone, and the directors would be appointed in exactly the same way as they were under the National Government. The Minister said the Opposition was attempting to sabotage, “for political pur-

poses,” the Bank of New Zealand. “PRUDENT” MOVE It was commercially prudent to appoint to the central bank executive someone with trading bank experience, he said. The Associate Minister of Finance (Mr Connelly) said that commercial institutions i had interlocking directorships to improve efficiency. I “We have this in holding I companies with subsidiaries,” Mr Connelly added. “It ensures that policies are carried out as intended.” It was appropriate that this principle should be applied to the Bank of New Zealand, he said. The debate was inter-

rupted by the adjournment at 10.27 p.m.