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Interest Rate Inquiry A Waste Of Time, Govt Tells Opposition

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, July 22 NZPA - The Government told opposition parties today their inquiry into bank interest rates was a waste of time because nothing could be done about them.

Labour, the Greens and the Progressive Party are going to hold their own inquiry after the finance and expenditure select committee decided not to.

National isn't going to take part in it, and in Parliament Labour's finance spokesman David Cunliffe said the Government was dismissing the concerns of thousands of New Zealanders.

"There appears at least to be a case to answer that New Zealanders are paying too much for floating mortgages, that interest rate spreads are even worse for small businesses, and farmers are facing a debt burden that is seriously eroding farm profitability in this country," he said.

Finance Minister Bill English said the Opposition's inquiry was a stunt.

"The progress is utterly predictable. The people will turn up, complain about the banks as we all do, the Opposition will issue some report using extravagant rhetoric, and we will be exactly where we started from," he said.

"We think bank margins might be too high. The simple question is what can be done about it. The Reserve Bank hasn't been able to come up with a solution."

Mr Cunliffe said that over the past year the Reserve Bank had cut the official cash rate by 575 basis points but business lending rates had only fallen by 243 points and the floating first mortgage rate had fallen by 446 points.

He said the Opposition's inquiry represented the only public forum available to "get all the facts on the table".

"I am encouraged by the responses so far from a range of sector groups, including banking and finance entities, and from individuals, and I expect there will be a significant number of submissions."

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