Banking operations pushing us towards trans-Tasman integration

by Vaughan Gunson

Bernard Hickey's blog post Single currency gaining speed (6 Sept) on the NZ Herald website links the operations of the Aussie-owned banks with moves towards increased trans-Tasman economic and political integration, specifically one dollar and common banking regulations.

As the Aussie parent banks are only interested in making as much profit as possible, and the role of the Australian state is to facilitate the making of those profits, the dominant position of the Aussie-owned banks in the NZ economy is resulting in ever greater political dominance of Australia over NZ.

The Rudd government and the Aussie parent banks are making much of the claim that they've been propping up the NZ economy post-financial crisis, through the Australian government's credit guarantee scheme and the parent banks loaning across the Tasman to support the operations of the Big Four in NZ. The reality of mega-profits been sucked out of NZ, chiefly through mortgage lending, over the preceding decade is of course disregarded. And today, the Big Four banks operating in NZ are continuing their profit run at the expense of grassroots Kiwi homeowners.

What's clear is that the operations of the Aussie-owned banks in NZ is propelling forward increased integration of the Australian and NZ economies, to the benefit of the former.

The question of NZ's eroding political sovereignty is one that many people will be interested in. The Bad Banks campaign has the potential to tap into a number of economic and political issues of popular concern, and which go to the heart of 21st century finance capitalism.