B.N.Z. charging an 'effective 22 p.c.’

Press, 13 June 1984, Page 9

B.N.Z. charging an 'effective 22 p.c.’

PA Wellington The Bank of New Zealand was charging an effective 22 per cent interest rate in the repayment of some mortgages, it was alleged in Parliament last evening. Mr R. J. Tizard (Lab., Otahuhu) said that the bank’s deputy chairman was Sir George Chapman, the former president of the National Partv.

Speaking during the Ad-dress-in-Reply debate, Mr Tizard said he had a mortgage with the B.N.Z. and the interest rate was increased during the wage-price freeze.

“When the regulations came in, they didn’t drop it,” he said.

“Now the message is getting through in part but George is still not on line with the boss.” Mr Tizard said he was told recently that if the mortgage was repaid within the term established at the start, a penalty of six months interest would be

imposed. "That imposition, which was not the practice of the bank in the past, represents an interest rate effectively of 22 per cent in the six months period if a mortgage is repaid," he said. The B.N.Z. did not have problems finding another investment — there was a queue of borrowers.

“There is no way they could claim they could not lend that money at the prevailing rates but George has so little confidence in his erstwhile boss that he is saying, T've got to require these conditions’." Mr Tizard said. The Minister of Education, Mr Wellington, said Labour was backing unions and financiers against the people.

He said the Labour Partyhad entered into an “unholy alliance of the hobnail boot and the bankcard.” He defended the $8 a week cost-of-living allow-

ance, saying the country could not have afforded more.

Mr T. J. Young (Lab., Eastern Hutt) said the Prime Minister. Sir Robert Muldoon, made no apology for the fact that he was prepared to offer 5 per cent above the rate of inflation for Our New Zealand Bonds. He said Sir Robert was prepared to reduce competition in the money market to ensure he received the amount he wanted. "That is not concern for people who have to borrow money. The policy has been brought in because the Government has the economy in a shambles."

Mr P. R. Burdon (Nat , Fendalton) said the Government had shown "more courage and conviction" than any post-war New Zealand government.

It had introduced valuable reforms in industrial relations and transport which were benefiting the growth of the economy.