Banking tender mooted for local authorities

Press, 17 May 1989, Page 33

Banking tender mooted for local authorities

PA Wellington The Local Government Association says the banking operations of the 85 new multi-purpose local authorities which will come into being next November 1 should be put out for tender. The association’s chief executive, Mr Brian McLay, said it supported the call of Federated Farmers and the Manufacturers’ Federation for lower interest rates. In particular, the association wanted a better deal for the authorities in all aspects of their banking, he said. “We’re talking about a much better job in a packaged manner, with the total costs of banking to local government made very clear before decisions are made as to

which banks are made,” Mr McLay said. Banking transactions made by local government totalled about $5OOO million a year, he said. The association had recommended the transition committee for each of the 85 authorities which will be set up to put banking requirements out for tender. Each one would need to have bank accounts in operation by November 1 and some of the committees were already preparing to hold a tender. The association had approached banks, which had branch networks, on the issue last January and five of them — Bank of New Zealand, Westpac Banking Corporation, ANZ

Bank, National Bank and Countrywide Bank — had shown an interest in participating, Mr McLay said. He said the association was completely neutral as to which banks were used by individual authorities. "Each member of the association has been asked to look at what produces the best results for itself and its community,” he added. The association has circulated the transition committees a list of criteria they should use to assess banking services, including their investment and cash handling facilities and the availability of advice. On November 1, the 85 city, district and regional councils will replace 600 authorities at the moment.