Activists send message to Key: “Make the banks pay!”

Bad Banks media release
13 May 2010

Prominent New Zealand activists and unionists are among the 53 public signatories to a letter to prime minister John Key calling for action to curb banking power and protect grassroots people. The full list of public signatories is included below.

The letter, written on behalf of grassroots people in New Zealand, reads:

Dear Mr Key,

Why are you wanting to raise GST? Food and everything else will be more expensive. It's already hard to make ends meet. Why don't you tax the banks and other fat cats that have been ripping us off? We want justice Mr Key, make them pay.

Signed,
Grassroots people of NZ

“The global financial crisis has inflicted a lot of pain on New Zealanders, with job losses and widespread clamps on wages,” says Vaughan Gunson, Bad Banks spokesperson. “And this pain is being compounded by the Big Four Aussie banks looking after their own equity position. They’ve been forcing mortgagee sales and inflicting penalties on homeowners struggling to meet their mortgage payments.”

“We're sending a message to John Key and the government: it's the banks and other financial fats cats who must be made to pay, not grassroots New Zealanders," says Gunson.

With the letter Bad Banks campaigners are proposing three "common sense" measures that would rein in the banks and deliver real benefits to grassroots people. The three measures are:

1. Stop forced mortgagee sales
Regulatory muscle used to stop banks turfing people out of their homes. A government body to oversee the re-negotiation of mortgages based on current market values and ability of the homeowner to pay.

2. Turn Kiwibank into a proper public bank
Offering 3% interest loans to first home buyers, zero-fee banking for people on modest incomes, and low interest loans to local bodies for sustainable eco-projects in the public good.

3. Introduce a Robin Hood Tax (also known as a Financial Transaction Tax)
A small percentage tax on financial transactions would net billions of dollars from banks and global financial speculators. GST could be phased out.

“We’re inviting New Zealanders to sign on to the letter and support these three demands,” says Gunson. "They're doable, if there's the political will."

People can add their name online by visiting the Bad Banks website www.badbanks.co.nz, or by going directly to http://www.ipetitions.com/petition/badbanks/. People can also make a comment if they wish.

“In a month’s time we’ll be formally forwarding the letter and the full list of people who’ve signed, plus their comments, to the prime minister,” says Gunson.

“We would like to see a debate in New Zealand about why the government is planning to lift GST to 15% in the Budget on 20 May, while the big banks are being allowed to continue making their mega-profits,” says Gunson. “Bad Banks campaigners are up for the debate – is Mr Key?"

See also Bad Banks media release (25 April), Something missing from GST debate: a Robin Hood Tax.

A higher resolution image of the attached graphic for use in print and online publications is available.

For more information and comment, contact

Vaughan Gunson
Bad Banks spokesperson
svpl(at)xtra.co.nz
(09)433 8897
021-0415 082

The 53 public signatories to the letter to Mr Key and the accompanying proposals to rein in the banks and protect grassroots people are:

Moea Armstrong, co-convenor Green Party of Aotearoa/NZ, Whangarei.

James Barber, male co-convenor Greens@Vic, Wellington.

Potaua Biasiny-Tule, TangataWhenua.com, Rotorua.

Nikolasa Biasiny-Tule, TangataWhenua.com, Rotorua.

Victor Billot, communications officer Maritime Union, Dunedin.

Pat Bolster, secretary Unions Wellington.

Sue Bradford, community activist, Auckland.

Grant Brookes, union delegate, Wellington.

Paul Bruce, Greater Wellington Regional Councillor.

Andrew Campbell, union organiser, Wellington.

Joe Carolan, campaigns officer Unite Union & editor SocialistAotearoa.org

Laurence Clark, cartoonist & journalist, Whangarei.

David Colyer, editor UNITYblog, on-line journal of Socialist Worker-New Zealand.

Catherine Delahunty, Green Party List MP, Coromandel Peninsula.

Vincent Eastwood, Guerilla Media, Auckland.

Aaron Edwards, organiser Green Party, Whangarei.

Tony Fala, community worker, Manukau City.

Joe Fleetwood
, general secretary Maritime Union of New Zealand, Wellington.

Quentin Findlay, economic development spokesperson Alliance Party, Christchurch.

Roger Fowler, manager Mangere East Community Learning Centre, Auckland.

Rob George, convenor Unions Waikato, Hamilton.

Vaughan Gunson, spokesperson Bad Banks & national chair Socialist Worker-New Zealand, Whangarei.

Omar Hamed, organiser Unite Union, Wellington.

Bernie Hornfeck, chairperson Rotorua Peoples’ Union.

Murray Horton, secretary/organiser for CAFCA (Campaign Against Foreign Control of Aotearoa), Christchurch.

Tim Howard, community worker, Whangarei.

Peter Hughes, union organiser, Auckland.

Prue Hyman, feminist economist Victoria University, Wellington.

Nik Janiurek, theatre lighting designer, Auckland.

Shafqat Kadri, student MA Applied Language Studies, University of Auckland.

Sydney Keepa, National Distribution Union Apiha Maori & co-convener Kaimahi Maori CTU Runanga,

Daphne Lawless, musician & writer, Auckland.

Dion Martin, organiser National Distribution Union, Palmerston North.

Paul Maunder, writer & community worker.

Matt McCarten, general secretary Unite Union, Auckland.

William (Billy) Mckee, director GreenCross NZ, Levin.

John Minto, community activist, Auckland.

Grant Morgan, international secretary Socialist Worker-New Zealand, Auckland.

Pat O'Dea, electrician & union activist, Auckland.

Hana el Ojeili, student LLB University of Auckland.

Dean Parker, NZ Writers' Guild, Auckland.

Len Parker, manager Socialist Centre, Auckland.

Kristy Pearson, student activist, Dunedin.

Paul Piesse, president Alliance Party, Christchurch.

Robert Popata, organiser Kotahitanga Union, Whangarei.

John Ryall, national secretary Service & Food Workers Union Nga Ringa Tota, Wellington.

Ross Scholes, Democracy activist, Auckland.

Tony Snelling-Berg, Socialist Worker activist, Tauranga.

Fran Strajnar, business owner, Auckland.

Owen Thompson, Unite Union, Auckland.

Mike Treen, national director Unite Union, Auckland.

Sarah Watson, writer & teacher, Wellington.

Oliver Woods, advertising manager, resident Singapore.

*All public signatories do so as individuals, with their positions or brief descriptors included for identification purposes.

**We welcome more community campaigners and prominent people becoming public signatories prior to the letter and accompanying demands being formally sent to the prime minister. Contact Vaughan, email svpl@xtra.co.nz or ph/txt 021-0415 082.

Something missing from GST debate: a Robin Hood Tax

BAD BANKS media release 
25 April 2010

"There’s something missing from the current debate about GST, and that’s a tax alternative, one that targets the banks and financial speculators," says Vaughan Gunson, Bad Banks spokesperson.

"Instead of making food and other basics more expensive for grassroots people, New Zealand needs to introduce a Financial Transaction Tax, or Robin Hood Tax as it’s been named by a popular British campaign," says Gunson.

"A small percentage tax on financial transactions would net billions annually from the big banks and financial speculators, who shift enormous amounts of money around everyday," says Gunson. "We could then remove GST from our food and begin to phase out this horrible regressive tax altogether. This is the circuit breaker that the GST debate needs." 

"Following the global financial implosion, and the role played by the banks and financial speculators, the time is right to introduce a tax which hits the most hated global purveyors of greed and exploitation. Yet the government is heading in the other direction, wanting to give tax breaks to these parasites, while hitting us with a GST increase," says Gunson.

Prime minister John Key wants to reward international financial speculators with tax breaks and other incentives, as part of his dream of turning New Zealand into a financial hub. The plan rests on enticing global investors to New Zealand with the promise of tax breaks. A recent IRD report entitled ‘Allowing a zero per cent tax rate for non-residents investing in a PIE [portfolio investment entity]’ reveals what's being considered. Under this proposal, overseas investors would be allowed to operate in this country and not pay New Zealand tax on their international investments.

"John Key would say that removing GST from food is too complicated - yet it’s not too difficult to change the tax laws to gift more profits to international fat cats?" asks Gunson. "Whose side are you on Mr Key? Hardworking grassroots people or the financial parasites?"

The Bad Banks campaign has drafted a letter to the prime minister on behalf of the grassroots people of New Zealand. It reads:

Dear Mr Key,

Why are you wanting to raise GST? Food and everything else will be more expensive. It's already hard to make ends meet. Why don't you tax the banks and other fat cats that have been ripping us off? We want justice Mr Key, make them pay.

Signed,
Grassroots people of NZ

With the letter the Bad Banks campaign is raising three "common sense" measures to curb banking power and protect grassroots people, which includes introducing a Robin Hood Tax. They are:

1. Stop forced mortgagee sales
Regulatory muscle used to stop banks turfing people out of their homes. A government body to oversee the re-negotiation of mortgages based on current market values and ability of the homeowner to pay.

2. Turn Kiwibank into a proper public bank
Offering 3% interest loans to first home buyers, zero-fee banking for people on modest incomes, and low interest loans to local bodies for sustainable eco-projects in the public good.

3. Introduce a Robin Hood Tax (also known as a Financial Transaction Tax)
A small percentage tax on financial transactions would net billions of dollars from banks and global financial speculators. GST could be phased out.

"We’re inviting people to sign-on electronically to our letter to prime minister John Key via the Bad Banks website www.badbanks.co.nz (or go directly to http://www.ipetitions.com/petition/badbanks/). We think a clear message needs to be sent to the government and John Key that it's the banks and other financial fats cats who must be made to pay," says Gunson.

The cartoon by KLARC accompanying this media release is available to be reproduced in print and web publications. For a bigger resolution image contact Vaughan at the email below.

For more comment, contact

Vaughan Gunson
Bad Banks spokesperson
svpl(at)xtra.co.nz
(09)433 8897
021-0415 082

The Crisis of Credit Visualised

The two animation videos below offer a very understandable explanation of the financial crisis sparked by the house price bust in the US. The representation of high risk mortgage borrowers is dodgy (you'll see what I mean), but on the whole their good. They show why the current strategy pursued by the global elites, basically pumping trillions of public money into the debt economy is doomed to fail. The big banks and other financial institutions want the party to continue of course - there's mega-profits to be made! So they aren't going to stop willingly. Hence the need for campaigns that target the banks and raises economic alternatives to a hyper-financialised economy that's one very big ticking bomb. To start building some public pressure against the banks sign the Make the Banks Pay online petition today, go to http://www.ipetitions.com/petition/badbanks/. Tell your friends.

The Crisis of Credit Visualised (Part 1)

The Crisis of Credit Visualised (Part 2)

Let’s Put an End to Public Debt Blackmail!

by Damien Millet and Sophie Perchellet and Eric Toussaint
from Global Research
3 April 2009

There is a striking contrast in the most industrialized countries at the epicenter of the global crisis that broke out in 2007-2008: the governments and their friends running the major banks are congratulating themselves on having saved the financial sector and initiated limited economic recovery, but people’s living conditions continue to deteriorate. Furthermore, with stimulus packages for the economy of over 1000 billion dollars, the major financial institutions have received government aid in the form of bail out funds, but the different States have no say in the management of these companies or are not taking advantage of this opportunity to radically change the policies governing them.

The path chosen by governments to emerge from the private financial crisis caused by bankers has led to an explosion in public debt. For many years to come, this sudden growth in public debt will be used by governments as a form of blackmail to impose social cuts and to deduct from the wages of “those at the bottom” the money needed to repay the public debt now held over our heads by the financial markets. How will this scenario be played out? Direct taxes on high income earners and companies will be reduced, while indirect taxes, such as VAT, will increase. Yet, as a percentage of disposable income, VAT is mainly a burden on low income households, which makes it an extremely unfair tax. For example, with a 20% VAT tax, a poor household that spends all its income just to survive, pays the equivalent of a 20% tax on its income, whereas a well off household, which saves 90% of its income, and therefore only spends 10% of it on daily expenses, pays the equivalent of a 2% tax on its income.

Therefore, the richest win twice: as a percentage of their disposable income, they contribute the least amount to taxes, and with the sums they have saved, they buy stocks of public debt and make profit from the interest paid by the State. On the contrary, wage earners and pensioners are doubly penalized: their taxes increase while public services and their social security benefits deteriorate. The repayment of public debt is therefore a mechanism for transferring revenue from “those at the bottom” to “those at the top”, as well as an effective form of blackmail in order to pursue neo-liberal policies benefitting “those at the top”. 

Meanwhile, profits and bonus distributions (in 2009, 1.75 billion euros in bonuses for the traders of French banks, and 20.3 billion dollars for Wall Street traders -- a 17% increase compared to 2008!) have returned to their mad ways while the people are called upon to tighten their belts. In addition, with the easy money central banks lend them, bankers and other institutional investors have launched into new speculative operations, which are highly dangerous for the rest of society, as we have seen with the Greek debt for example, not to mention the price of raw materials and the dollar. Not a word from the International Monetary Fund (IMF) or the Organization for Economic Cooperation and Development (OECD), and a refusal from the G20 to take measures on bonuses and speculation. Everyone agrees to intensify the race for profit based on the pretext that this will eventually lead to job creation. 

The Finance Ministers’ overall objective is a return to growth, even if it turns out to be unequal and harmful to the environment. In no way do they question the system which has proven to be a failure. If they do not react, the dismantling of the State will be pushed to its limits, and the entire cost of the crisis will be borne by the very people who are its victims, while those responsible for it will emerge more powerful than ever before. Today, banks and hedge funds have been saved with public money without offering the slightest tangible compensation in return.

We believe public policy should be reformulated as follows: “You large creditors have greatly profited from public debt, but fundamental human rights are seriously threatened and inequalities are widening at an alarming rate. Our priority is to maintain and guarantee these fundamental rights and it is you, the large creditors, who should pay for this. We are going to tax you according to the amount that you loaned back to us: the money will not come out of your pockets but the loans will disappear. Count yourselves lucky that we are not demanding back the interest we have already paid you to the detriment of citizens’ interests!” In a nutshell, we support the idea of taxing the large creditors, such as banks, insurance companies, and hedge funds, as well as wealthy individuals according to the money owed to them. This tax revenue would give the State the means to increase social spending and create socially useful and economically sustainable employment. It would eliminate public debt in the North, without making the people who are the victims of this crisis pay. At the same time, it would place the entire burden on those who have caused or worsened the crisis, and have already greatly profited from this debt.

Our proposition would entail a radical change towards a policy of redistribution of wealth, benefiting those who produce wealth and not those who speculate on it. If coupled with the cancellation of foreign public debt of developing countries and a series of reforms (including wide ranging fiscal reform, a radical reduction in working hours without loss of wages and with compensatory hiring, and the transfer of the financial sector to the public domain with citizen control), these measures could enable us to emerge from the current crisis with social justice and in the interests of the people.

Translated by Francesca Denley in collaboration with Charles la Via.

Eric Toussaint is Spokesman, vice-president of CADTM France and president of CADTM Belgium, Committee for the Abolition of Third World Debt, www.cadtm.org.

Rolling Stone: Looting Main Street

by Matt  Taibbi
from Rolling Stone
31 March 2009

If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama. Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while. The county, it turned out, was more than $5 billion in debt — meaning that courthouses, jails and sheriff's precincts had to be closed so that Wall Street banks could be paid.

As public services in and around Birmingham were stripped to the bone, Pack struggled to support her family on a weekly unemployment check of $260. Nearly a fourth of that went to pay for her health insurance, which the county no longer covered. She also fielded calls from laid-off co-workers who had it even tougher. "I'd be on the phone sometimes until two in the morning," she says. "I had to talk more than one person out of suicide. For some of the men supporting families, it was so hard — foreclosure, bankruptcy. I'd go to bed at night, and I'd be in tears."

Continue

ANZ tops worst transnational list

by Adrian Hatwell
from BusinessDay.co.nz

Australian-owned ANZ Bank has won the annual Roger Award for worst transnational company operating in New Zealand, due to its leading role in the nation’s financial sector strife.

A panel of five judges said foreign-owned banks in general were a large drain on New Zealand’s economy.

Allegations of distortions of lending margins, tax avoidance, risky lending practices, overcharging, and poor customer treatment were rife, the judges said.

However the ANZ’s behaviour during 2009, particularly its part in the ING funds fiasco, made the bank the unanimous pick for the top title, they said.

ANZ did not respond to requests for comment on its Roger Award win.

Murray Horton, secretary for Campaign Against Foreign Control of Aotearoa, the award’s organiser, describes the annual event as a sort of “people’s court” in which the public nominate candidates and a panel of experts weigh the facts and evidence before making a judgment.

Dr Joce Jesson, senior lecturer in critical studies at Auckland University and one of this year’s judges, believed the award blows apart the bank’s careful PR campaign and shows the public the company’s true face.

“The banks want you to believe that they are there for you, but no, the bank is there for [its foreign owners],” said Dr Jesson.

“We need to start recognising that these banks rip money out of New Zealand.”

Fellow judge, Dr Wayne Hope, associate professor of communications studies at AUT University, agreed that although ANZ had distinguished itself above its competition, the award indicated problems with the transnational-focus of the banking system in general.

“The judges’ report is important,” said Dr Hope, “because it contributes to the ongoing public debate about what it is that banks do, and the need for people to get a fair deal.”

One of the leading factors in ANZ’s win was its handling of last year’s ING affair, which saw 13,000 small investors misled into taking money out of safe term deposits and moving it into high-risk funds, which were then frozen as their value plummeted.

The Frozen Funds Group represents 1,100 of those affected in the ING fiasco, many of who are elderly and lost their entire savings in the funds.

FFG spokesperson Gerard Prinsen was delighted with ANZ’s Roger Award win.

"It’s fantastic,” Prinsen said. “They battled hard and did their utmost best, they deserved to win. Totally.”

He was particularly impressed with the way the bank had upset almost every party in parliament.

“[It put] Act, Labour, and the Greens all in the same boat to row against the ANZ.”

The Commerce Commission will conclude a 17-month investigation of ANZ’s handling of the ING matter at the end of the month. If the bank is found to have breached the law then compensation could be paid to investors.

Prinsen said that although the system may be slow and complex, the progress of the Frozen Funds Group shows that it does work.

The Roger Award judges were less confident in the current system’s ability to keep banks honest and urged further government regulation.

There was general agreement that one thing people can do to avoid the issues raised by this year’s award is to move their business from Australian-owned banks to local alternatives.

“Many of the people [burned in the ING affair] have been lifetime customers of the ANZ, for 50 to 60 years,” said Prinsen. “To see the bank treat you like this, it really hurts.”

Rio Tinto Aluminium was the runner-up for the 2009 award, with Telecom in third place. The Auckland City Council was awarded the Accomplice Award for its part in privatising the city’s waste management system through Transpacific Industries Group.

Bad Banks leaflet #6: MAKE THE BANKS PAY

The latest Bad Banks leaflet is out now (leaflet #6). It features on the front a "letter" to prime minister John Key, which reads:

Dear Mr Key,

Why are you wanting to raise GST? Food and everything else will be more expensive. It's already hard to make ends meet. Why don't you tax the banks and other fat cats that have been ripping us off? We want justice Mr Key, make them pay.

Signed,
Grassroots people of NZ

On the back of the leaflet, under the headline 'Make the Banks Pay' are three demands:

1. Stop forced mortgagee sales
Regulatory muscle used to stop banks turfing people out of their homes. A government body to oversee the re-negotiation of mortgages based on current market values and ability of the homeowner to pay.

2. Turn Kiwibank into a proper public bank
Offering 3% interest loans to first home buyers, zero-fee banking for people on modest incomes, and low interest loans to local bodies for sustainable eco-projects in the public good.

3. Introduce a Robin Hood Tax
(also known as a Financial Transaction Tax)
A small percentage tax on financial transactions would net billions of dollars from banks and global financial speculators. GST could be phased out.

These "common sense" measures to curb banking power and protect grassroots people should hit the mark with people who already have negative attitudes towards the banks, which is the majority of New Zealanders. Early feedback from people on the street to the new leaflet has been positive.


SIGN ON TO OUR "LETTER" TO JOHN KEY

To go with the new leaflet, there's a 'Make the Banks Pay' sign-up sheet where people can give their support to our "letter" to John Key and the three demands.

If you would like bulk copies of Bad Banks leaflet #6 and the 'Make the Banks Pay' sign-up sheet, contact Vaughan svpl(at)xtra.co.nz or 021-0415 082.

Send all completed sign-up sheets to Socialist Worker/Bad Banks, PO Box 13-685, Auckland.


SIGN ON ONLINE

There's an online version of the 'Make the Banks Pay' sign-up. Go to http://www.ipetitions.com/petition/badbanks/ to add your signature. Tell your friends, family and workmates. We want to get as many signatures as possible, to grow the campaign and hopefully get crucial media coverage.

You can also join, and invite others to join, the 'Make the Banks Pay' Facebook group. Go to http://www.facebook.com/#!/group.php?gid=392390694275&ref=ts


IN THE MEDIA AT BUDGET TIME

There's going to be a lot of media coverage either side of the upcoming budget (20 May) about an almost certain hike in GST, as well as other policies the National government will be implementing in response to the global economic crisis. It's possible that the alternative message of the Bad Banks campaign: "make the banks pay, not grassroots people", could break through into the media. That possibility will be increased if we can build some campaign momentum on the ground and online over the next couple of months.

If we work hard we may be able to lift the Bad Banks campaign to the next level. The three "common sense" measures are necessary to curb banking power and protect grassroots people in New Zealand. If we act together we just might be able to deliver a blow to the banks.

In solidarity,

Vaughan Gunson
Bad Banks campaign manager
svpl(at)xtra.co.nz
021-0415 082

Bad Bank wins Roger Award

ANZ has won the Roger Award for the worst transnational corporation operating in New Zealand in 2009. Below is the judge's statement relating to the winner, ANZ. The judges were Christine Dann, Bryan Gould, Joce Jesson, Paul Corliss and Wayne Hope.

The Roger Award is organised each year by CAFCA (Campaign against Foreign Control of Aotearoa).

From the judge's statement:

The Winner: ANZ

The judges all noted the generally egregious behaviour of the Australian-owned banks that were nominated (ANZ, BNZ and Westpac), and were unanimous in picking them as the worst TNCs operating in New Zealand in 2009.

As the Council of Trade Unions noted in its submission to the Independent Parliamentary Banking Inquiry, the foreign–owned banks are the Achilles heel of the New Zealand economy, given that they contribute to the lion’s share of the national debt. They account for nearly 70% of investment income debts on the national balance of payments and for 74% of the economy’s net overseas indebtedness.

During the 2009 year the banks were accused of:

1. Distorted lending margins in their favour and against their customers
2. Tax dodging on a grand scale
3. Poor lending and investment practices
4. Overcharging and profiteering
5. Poor employment and customer service practices

The banks behaved so badly in 2009 (and 2008) that they were the subject of a Parliamentary Select Committee investigation early in 2009. Despite receiving reports giving good reason to conclude that strong Government action was needed to rein in the bad behaviour of the banks, and to require them to deal with both customers (and the Government, which provided them with security during the 2008 financial crisis) more honestly and fairly, the National Party-dominated Select Committee did not recommend such actions to Government. This led to the Labour, Green and Progressive MPs setting up their own Independent Parliamentary Banking Inquiry. This Inquiry exposed more issues of concern, and called for better legislation and regulation to protect the public from predatory banks.

Also during 2009, bank after bank appeared before the High Court to answer allegations of tax evasion, amounting to billions of dollars. After high level negotiations they finally reached an out-of-court settlement that saw them collectively pay the Inland Revenue Department more than $2.2 billion. In a political climate where we are constantly being told that taxes are an evil imposition, rather than what they really are - the price we pay for a democratic and functional society - we think that a special Public Heroes award should go to the Government lawyers, IRD officials and others responsible for getting these slippery banking snakes to pay what they rightly owe the nation.

One of the Roger Award judges noted the banks were richly deserving of the Award since they have been ''...doing great damage for many years to the whole of the New Zealand economy …through irresponsible lending (thereby stoking inflation), and expatriating excessive profits … while all the time avoiding censure and pointing the finger at public spending as the cause of our economic problems…[While] this year we have seen the truly scandalous tax avoidance saga, from which the banks have again escaped remarkably lightly; if you or I had committed a similar offence of one thousandth the size we would have ended up in jail.”

However, it was a tough decision to pick the worst of the worst, considering that all the foreign-owned banks were guilty of some degree of tax dodging, overcharging on credit card fees and loans, not passing on reductions in interest rates, and treating customers and staff poorly. In the end the judges decided that ANZ deserved top place, with the ING scandal tipping the balance in its favour (for full details of the ING scandal, see the next section “Rattlesnakes In the Grass’).

In 2008 ANZ was also a finalist, with the 2008 judges noting the following ‘fine’ qualities for its inclusion:

“Evidence presented to the judges portrayed ANZ-National as the most rapacious, inept and irresponsible of the banks over the past couple of years, which assured it a good chance of securing the Roger Award. This bank was a distinguished finalist in 2007 also, for its despicable role in the saga of Godfrey Hirst and the Feltex carpet business”.

ANZ has succeeded in winning the 2009 Roger Award because the ING funds fiasco is simply and plainly ‘pure greed capitalism’ at its worst. This debacle saw the bank immorally misleading small investors into taking their money out of safe term deposits and putting it into highly risky investments, while assuring them that these investments were safe. In fact, most of them were highly dangerous and dodgy, and lost millions of investors' money. When the betrayed investors got organised and put pressure on the bank to repay what had been lost, ANZ's repayment offer came with big strings attached - investors who refused to sign a waiver agreeing not to take legal action against the bank would receive no compensation. In the words of the judges, this was ‘the most extreme case of anti-democratic manipulation by a transnational within New Zealand during 2009. Simply, ANZ was employing financial pressure to erase the legal rights of investors – a truly Roger winning performance.’

The ING debacle was, as one judge noted, ‘the icing on the already baked Roger cake.’ Thus ANZ is the winner of the 2009 Roger Award.

We could replace tax on essentials with one on destructive speculation

by Barry Coates
from stuff.co.nz
2 March 2010

Some things seem too good to be true. But sometimes it's because they are good ideas whose time has come. One of those is the proposal to levy a tiny tax on the massive movements of money around the world. It's time our Government looked more closely at it.

Why? Because a financial transactions tax will raise significant revenue without adversely affecting most New Zealanders, support our international obligations and reduce the volatility of our currency. It's a win-win-win.

Instead, our Government's attention has been focused on incremental tax reforms that shuffle taxes from one pocket to the other - lower direct taxes and higher GST. The net effect inevitably seems to be that those on lower incomes bear a greater share of the burden. This is all "business as usual" ignoring some longer-term challenges that we face - reform of the financial sector to curb excessive risk-taking, making the transition to a low-carbon economy, and playing our part in the global effort to eradicate extreme poverty.

The proposed FTT is a levy of 0.05 per cent, on average, applied to the trading of a range of equities, bonds, derivatives and foreign exchange transactions (ie 5 cents for a transaction of $100). Such a tax is predicted to curb a lot of speculative activity, but would still raise NZ$570 billion a year globally.

It sounds like a radical proposal, but it is really like extending GST, at a much reduced rate, to wholesale financial transactions - they are currently exempt. It is supported by Japan and leaders of the three largest EU countries - Gordon Brown, Angela Merkel and Nicolas Sarkozy - along with hundreds of eminent economists, financial regulators like Lord Turner and Paul Volcker, financial traders like George Soros and investment guru Warren Buffet.

An international agreement for all countries to introduce a common FTT at the same time would be ideal. This approach is now being considered by the IMF and G20 countries. It should be supported by our Government. But difficulties in getting such a deal should not prevent countries from moving ahead themselves.

Belgium already runs a limited form of FTT and its banking sector has not suffered. A co-ordinated approach would be preferable, but any government can now introduce a levy on trading of their currency, no matter where the transactions take place. The high level of automation in the banking industry makes administration feasible at a low cost.

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This tax would miss the average bank customer completely, even those buying foreign currency to travel overseas. It is a tax on wholesale finance - it would apply to the high-volume, high-frequency trading and speculation that sees massive sums of money being transferred at a keystroke. The "casino economy" of global finance has grown rapidly in recent years - international financial transactions are now 60 times the level of world GDP. Unfortunately the real economy is not insulated from its collapses. The financial crisis cost the world a staggering US$11.9 trillion, according to the IMF.

The finance industry is a deliberate target for the FTT. It is the most profitable industry in the world, with profits per employee 26 times as high as other business sectors. And, as we have seen in New Zealand, banks are adept at using legal loopholes and tax havens to avoid paying their fair share of tax. The FTT could generate enough revenue to avoid raising GST, replacing taxes on life's essentials with a tax on socially destructive financial speculation. This is consistent with the principle of taxing activities that we want to discourage, as opposed to taxing productive work or basic necessities.

Nobel-prize-winning economist James Tobin described such a tax as "throwing sand in the wheels" of international currency trading. Some sand may well help reduce the volatility of the New Zealand dollar, which attracts massive trading and speculative attacks - according to the Bank of International Settlements, the Kiwi dollar is the 11th most traded currency, far beyond our role in the real economy.

The proposal put forward by a large coalition of groups internationally, under the banner of the "Robin Hood" tax, is that half of the funds raised would be used domestically to help fund public services and reduce government deficits resulting from the financial crisis. A quarter of the funds would be contributed to support international efforts to overcome extreme poverty in the developing world and support the countries that have suffered most from the financial crisis.

The balance would be used to tackle climate change. It could dramatically reduce the emissions from global deforestation and provide most of the funding that is needed by vulnerable countries, including our Pacific neighbours, to protect themselves and adapt to climate change impacts.

Before we dismiss the idea, consider this: just two minutes of a global FTT could pay for basic healthcare for 100,000 people. Two months of the FTT would provide the funds necessary to get every child on Earth into school.

Our Government should take a close look.

Barry Coates is the executive director of Oxfam New Zealand.

Robin Hood tax has Bono and co all a-quiver

by Finlay MacDonald
from Sunday Star Times
14 February 2010

One should always be wary of seemingly simple solutions to seemingly intractable problems – especially solutions endorsed by Bono. Yet the idea of a "Robin Hood tax" on global financial transactions, despite appearing almost too good to be true and, yes, backed by U2's blathering messiah of world peace himself, really is hard to fault.

From a New Zealand perspective the launch of a fresh campaign for such a tax was beautifully timed, coinciding as it did with the timid revenue tinkering proposed by the prime minister. If you'd found yourself drifting off listening to John Key's uninspiring prescriptions, you could have hopped on YouTube and watched the snakily funny Bill Nighy video in which he plays a smarmy banker failing to justify his opposition to a Robin Hood tax.

Like most bankers and tax experts who thrive on the perceived complexity of their fields, simplicity and common sense is his enemy. The central genius of the Robin Hood idea is that it treats the global financial system for what it really is – an economic activity that can be taxed like anything else. Indeed, since so much of the world's total corporate profits now derive from unproductive speculative trades and other money-go-rounds – a phenomenon sometimes described as the "financialisation" of the economy – it's long overdue for scrutiny.

The idea is not particularly new, but it gained new impetus with the global financial crisis and the debate about longer-term remedies for reckless investment banking and foreign exchange dealing. The primary purpose of such a tax, in fact, would be to take some of the heat out of money markets and reduce exchange rate volatility. As its original proponent James Tobin put it, it would "put sand in the wheels of international finance" by creating a major disincentive to short-term speculative transactions.

One benefit of this – aside from curbing the sort of market panics that trigger major crises and ruin ordinary people's lives – would be the diversion of investment back towards the productive sectors. Also, and not least, it would raise the kind of money that makes a difference to the worthy goals humanity (and Bono) aspires to, like fighting poverty and climate change.

Of course, if successful, such a tax would reduce its own potential revenue base, which is why estimates of what it might generate are problematic. However, given that roughly $1.5 trillion is traded in world currency markets each day, even a significantly reduced amount would yield a hefty annual tax take. And it's not as if anyone is arguing for a regime so punitive it would put forex dealers out of work and shut Lamborghini showrooms. Suggestions of between 0.05 and 0.25 percent could raise between $90 and $300 billion a year, depending on the forecast. According to a report by liberal think tank The New Economics Foundation, quoting previous expert analysis including research by the IMF, a currency transactions tax is administratively and logistically feasible – albeit dependent on international political co-operation.

Well, there had to be a catch. Getting governments to agree on such a policy when they are so much in thrall to their domestic financial lobbies would be about as easy as achieving that other noble goal, world peace. British Prime Minister Gordon Brown advocated such a tax at the G20 meeting late last year and continues to promote the idea. Yet only last month the governor of the Bank of England humiliated him by dismissing the proposal as "bottom of the list" of reform options.

In the US, source of the present crisis (which is far from over), Wall Street has very effectively blocked all attempts at reform, historically and now. It's brazen and shameless – how else to explain a banking sector that could revive its morally obscene bonus culture within months of being bailed out with billions upon billions of public dollars? Expecting such creatures to act other than purely self-interestedly is futile.

Outside the banker bubble, though, there is plenty of support for a Robin Hood tax, including from industry leaders, who actually make and sell stuff.

As the boss of New Zealand fishing giant Sanford said to shareholders just the other day, "A tax on non-trade-related currency transactions could not only earn significant income for the government, it could also result in our exchange rate moving closer to its realistic value and thereby add significant value to the wealth of New Zealanders." Now there's a tax reform plan with genuine vision – precisely why this government and its former merchant banker boss could never come up with it.

finlay.macdonald@star-times.co.nz

The Robin Hood Tax - Video

Bank wholesale guarantee could be ending – time for a new bank tax?

from the gossip...
Finsec Union's unofficial weblog
11 Feb 2010

The New Zealand government is sending signals that its wholesale funding guarantee for banks could be winding down, following a decision to end the similar scheme in Australia.

Finsec Campaigns Director Tali Williams said that any end to the wholesale funding guarantee should be accompanied by a tax like that being discussed in Europe and America in order to ensure that banks are paying their fair share of taxes – given the huge influence and risks they pose to our global and national economies.

“A tax like Obama and other world leaders are proposing would give greater security to our economies.  It would also provide much needed income to address both the impacts of the global financial crisis and pressing needs of many countries to do more to assist their citizens and taxpayers – not less.”

A campaign for a global tax on banks’ financial transactions, dubbed a “Robin Hood” tax, was launched last week by 50 organisations including Oxfam, aid agencies, unions, environmental groups and economists. Actor Bill Nighy fronts a promotional film for the tax – you can check it out at the link below:

http://robinhoodtax.org.uk/

Westpac chief treats herself

from ...the gossip
Finsec Union's unofficial weblog
8 February 2010   

Westpac CEO Gail Kelly recently spent $11.2 million on a new property in an affluent Sydney beach suburb. The two-hectare property features an indoor heated pool, a spa, a tennis court and incredibly, an Olympic equestrian arena! So extravagant was the price tag, it marked a record price for any property in the district.

Gail Kelly’s splurge looks even more out of place when many of the bank’s customers and staff (in New Zealand and Australia) are feeling the pinch of the recession. Nice for some!

Bad banks — New Zealand’s black sheep

by Paola Harvey
from Green Left Weekly (Australia)
30 January 2010

Although New Zealand, like Australia, has not been as badly affected by the global economic crisis as the US or Europe, workers are facing hardship.

Bronwen Beechey, an activist from Socialist Worker New Zealand (SWNZ), told Green Left Weekly: “There’ have been a lot of redundancies, places have been closed down.”

Beechey and SWNZ activist Peter Hughes were in Sydney to attend the January 3-6 Socialist Alliance national conference. They spoke to GLW about the SWNZ’s “bad banks” campaign, which takes aim at the cause of the global financial crisis — neoliberal capitalism.

“For people on low incomes life’s just been getting tougher because [they are] losing their jobs and food prices and rents and all of it have not come down substantially”, Beechey said.

“All the indicators, the social services, people asking for assistance, for food parcels, people losing their homes — they’ve all skyrocketed.”

Hughes said employers have used the crisis to justify attacking workers’ wages and conditions. “In the last 12 months, there have been no less than eight lockouts of workers.

“One of the most shameful examples was a service provider for the elderly that insisted that if the workers in that field did not accept the minimum wage [NZ$12.50 per hour] they’d be locked out.

“That’s quite a serious indication of how they [the bosses] see the crisis being resolved to their advantage and workers’ disadvantage.”

The New Zealand government’s response has been the same as capitalist governments around the world — bail out the banks and the big capitalists, and make the workers pay.

But they are not getting it all their own way. The government’s attempt to impose an unofficial wage freeze in the public service was recently challenged. Support staff in the education sector won a small wage rise.

That win will set the tone for the upcoming nurses’ and general education unions’ wage negotiations. “No less than that, will be the call, I’m sure”, said Hughes. “So that’s a good sign.

“I heard at the [Socialist Alliance] conference, that [Australian Prime Minister Kevin Rudd] said that the recovery’s going to be worse than the recession.

“I’m quite sure that’s their intention for us in New Zealand as well, working people will be made to pay for the recovery — if there’s going to be one.

“But our assessment is that there can be no real recovery in the current market economy, not in the foreseeable future. That’s going to lead to all sorts of crises for them, which they will try to push on us.

“We have to organise people to resist that.”

The discussion about neoliberalism at the NZ Council of Trade Unions’ 2009 conference has opened up more space on the left to fight back against these future crises.

At the conference, union activists talked about workers’ cooperatives, building and strengthening the union movement and not accepting the neoliberal capitalist model as the only option.

Beechey said: “It also talk[ed] about climate change and the need for an alternative economic strategy which is an implicit criticism of neoliberal capitalism.”

Hughes added: “While it’s not a policy position as such, it’s a discussion that’s been opened up within the trade union movement.

“It’s not an accepted policy, it could be watered down significantly and it’ll come down to how different unions interpret that for building a broader perspective in the membership.

“[But] when you think about how closely linked the trade union movement has been to the Labour Party … this is a departure.

“The fact that they’re daring to criticise publicly this position opens up a space on the left for us to work with trade union activists in a much more healthy and progressive way.”

Many people in New Zealand continue to struggle with little indication of their situation improving in the near future.

There has been an increase in the number of houses sold due to people defaulting on their home loans. A large proportion of these have been people with one home — not property speculators.

Hughes said the defaulters “simply cannot pay because they’ve lost their job, they’ve been made redundant and they have reduced incomes”.

“That’s pretty devastating for families and has shown no sign of abating at all.”

The actions of the banks have been completely shameful. Before the crisis, banks were advertising loans for 100% of the price of a house.

But after the crisis, their ruthless approach to lending has meant many people who were lured into the property market by these loans have had their home repossessed.

“Our campaign around ‘bad banks’ is trying to make them pay really”, said Hughes. “Because they’re the ones that have played a big role [in the crisis] and they’re plundering the profits of working people.”

The bad banks campaign is focusing on demystifying what the banks actually do and how they caused the financial crisis. It is also calling for a financial transaction tax, as opposed to a goods and services tax.

A GST is a regressive tax, that is it affects the poorest the most, because the poor are taxed the same as the rich for goods despite having less ability to pay.

A financial transaction tax, on the other hand, would be a progressive tax. It would affect banks, corporations and the wealthy the most, because they account for the vast majority of financial transactions.

“We see the bad banks campaign as striking right to the heart of neo-liberalism”, Hughes said. “These banks have got their fingers in the lives of every working class person, whether it’s controlling their mortgage, their credit card, or their bank charges.

“They’re bloody pillaging basically. Their pockets are huge, they’re not paying their taxes.

“They’re not very popular with workers at the moment.”

Video: ASB Exposed as lying Banksters (MR NEWS)

Latest Bad Banks cartoon by KLARC

Banksters and the greatest crime against humanity

The big global banks are key drivers of carbon emissions trading, which, as leading climate change scientist James Hanson argues, will increase carbon emissions, not decrease them. The role of the global banking class in sucking up trillions of dollars of "bailout money" to speculate in carbon trading (akin to derivatives trading) as the world approaches irreversible global warming tipping points has to be the greatest crime against humanity.

A necessary popular campaign against the banks is part of struggle to save the planet from the catastrophic climate change. See Bad Banks leaflet #3 on the pollution market.

Leading Global Warming Crusader: Cap and Trade May INCREASE CO2 Emissions

by Washington's Blog
from Global Research
6 January 2010

James Hansen - the world's leading climate scientist fighting against global warming - told Amy Goodman this morning that cap and trade not only won't reduce emissions, it may actually increase them:

"The problem is that the emissions just go someplace else. That’s what happened after Kyoto, and that’s what would happen again, if—as long as fossil fuels are the cheapest energy, they will be burned someplace. You know, the Europeans thought they actually reduced their emissions after Kyoto, but what happened was the products that had been made in their countries began to be made in other countries, which were burning the cheapest form of fossil fuel, so the total emissions actually increased..."

Environmental groups such as Friends of the Earth and Greenpeace are also against cap and trade, as is the head of California's cap and trade program for the EPA.

Hansen also told Goodman that (notwithstanding Paul Krugman's assertions) most economists say that cap and trade won't work:

"I’ve talked with many economists, and the majority of them agree that the cap and trade with offsets is not the way to address the problem.

As I have previously pointed out:

• The economists who invented cap-and-trade say that it won't work for global warming

• European criminal investigators have determined that there is a tremendous amount of fraud occurring in the carbon trading market. Indeed, organized crime has largely taken over the European cap and trade market.

• Former U.S. Undersecretary of Commerce for Economic Affairs Robert Shapiro says that the proposed cap and trade law "has no provisions to prevent insider trading by utilities and energy companies or a financial meltdown from speculators trading frantically in the permits and their derivatives."
  

Our bailout buddies over at Goldman Sachs, JP Morgan, Morgan Stanley, Citigroup and the other Wall Street behemoths are buying heavily into carbon trading. As University of Maryland professor economics professor and former Chief Economist at the U.S. International Trade Commission Peter Morici writes:

"Obama must ensure that the banks use the trillions of dollars in federal bailout assistance to renegotiate mortgages and make new loans to worthy homebuyers and businesses. Obama must make certain that banks do not continue to squander federal largess by padding executive bonuses, acquiring other banks and pursuing new high-return, high-risk lines of businesses in merger activity, carbon trading and complex derivatives. Industry leaders like Citigroup have announced plans to move in those directions. Many of these bankers enjoyed influence in and contributed generously to the Obama campaign. Now it remains to be seen if a President Obama can stand up to these same bankers and persuade or compel them to act responsibly."

In other words, the same companies that made billions off of derivatives and other scams and are now getting bailed out on your dime are going to make billions from carbon trading.

One the largest boosters for cap and trade invented credit default swaps - which were supposed to increase financial stability, but instead were a large part of the reason that the world economy crashed last year.

Iceland: People power rises against financial overlords

The people of Iceland are saying no to having the cost of the financial crisis dumped on them. A quarter of Iceland's voters have signed a petition rejecting a deal which would see Iceland, through an IMF loan, pay billions to overseas creditors who lost money when the Icelandic banks went belly-up following the global financial crisis. The deal was the result of pressure from the British and Dutch governments in support of their banking class, who had a major hand in the high risk profiteering of Iceland's banks prior to the crisis.

While the situation in Iceland is at an extreme, it shows that it's possible for people to mobilise against the kings of capital and the governments that act to protect the interests of the mega-rich. With no real change in the way the big global banks and financial institutions are operating, and with the world economy having an ever increasing debt overhang, it is inevitable that more countries will be thrown into extreme economic and political crisis. In New Zealand, we need to prepare for such an event by building a broad and multi-headed campaign against the banks and neo-liberalism. To join the Bad Banks campaign email Vaughan svpl(at)xtra.co.nz

Angry Iceland Defies the World

by Ambrose Evans-Pritchard
from Telegraph
6 January 2010

Iceland's president has blocked a Bill to pay Britain and Holland up to £3.4bn for Icesave depositors, acknowledging that popular feeling in the island nation is too strong to proceed without a referendum. 


The move reopens a bitter dispute and greatly complicates Iceland's loan agreement with the International Monetary Fund. It has already led to a fresh downgrade to BB+ by Fitch Ratings, which called the decision "a significant setback to Iceland's efforts to restore normal financial relations with the rest of the world."

The Icesave law was passed by Iceland's parliament in a knife-edge vote late last year, but a petition by the InDefense movement has changed the political landscape. The lobby collected 56,000 signatures – a quarter of voters.


President Olafur Ragnar Grimsson said the "overwhelming majority" wanted a direct say over the matter, and that no settlement would hold without their assent.

"It is the cornerstone of the constitutional structure of the Republic of Iceland that the people are the supreme judge of the validity of the law," he said. "At this crucial juncture it is also important to emphasise that the recovery of the Icelandic economy is a matter of vital urgency".

If voters say "No" when the referendum takes place in a couple of months, the accord thrashed out with London and the Hague during months of wrangling will no longer have any credibility, whatever the legal niceties.

The reality is that Icelanders have erupted in collective rage at what they believe to be gross injustice and "gunboat diplomacy" by Downing Street. What rankles is Britain's use of anti-terrorism law to freeze Iceland's assets. The Icelandic central bank was listed besides al-Qaeda as a terrorist body – unprecedented treatment for a NATO ally. Holland was careful not to go so far.

"Importers couldn't get trade finance for food. We feel deeply wronged," said Johannes Skulason from InDefence. Shelves were bare for weeks in Icelandic shops as the banking system disintegrated.

Einars Már Gudmundsson, a novelist, said most citizens were unaware that Iceland's three leading banks –Landsbanki, Glitnir and Kaupthing – were operating as global hedge funds with exposure of 11 times Iceland's GDP.

"I had never heard of Icesave till this happened," said Mr Gudmundsson. "We were told that what these banks did abroad was nothing to do with us but when it all went wrong the responsibility fell back on us. Profits were privatised, but losses were nationalised."

He added: "We're told if we reject the terms, we will be the Cuba of the North. But if we accept, we'll be the Haiti of the North."

Both Britain and Holland expect Iceland to stick to its agreement, but the legal claims are far from watertight. Iceland accepted "political responsibility" for the 320,000 British and Dutch deposits in exchange for lenient terms (arguably denied) in November 2008, but never accepted the legal claim.

The UK has refunded private savers up to £50,000, but councils such as Kent are relying on the deal to recoup their money. They have retrieved £100m of the £900m put in Icelandic accounts.

Iceland's Left-wing coalition – which unseated free marketeers in February's "Saucepan Revolution" – has backed the Icesave terms, deeming it is the only way for Iceland to move beyond the disastrous episode. The petitioners said they accept that Iceland's people should foot part of the bill, but object to the "Versailles" terms: a loan at 5.55pc interest, to be repaid within 15 years. The central banks said this will increase Iceland's public debt by 20pc of GDP.

A report by Sweden's Riksbank said Britain and Europe share blame for the fiasco. It said "absurd" EU rules – which cover Iceland indirectly – told states to set up a "guarantee scheme" for banks, but never said taxpayers were liable for losses.

The reports added that the UK "hardly bothered" to inform savers that the schemes were ill-funded. "The conclusion is clear: the EU host countries (UK and Holland) are also to blame for Iceland's disaster. It would be reasonable that they carry some of the burden. It takes two to tango," it said.

The UK Financial Services Authority said it was unable to stop Icelandic banks raising deposits in the UK under the EU's "passport" system, even when they began milking UK customers to cover losses at home.

Whatever the rights and wrongs, Iceland was by then already being crushed by a financial tsunami. Britain's use of anti-terror laws at that moment will not sit pretty in diplomatic history.

Finsec Union slams Aussie-owned banks

from TVNZ website

Australian-owned banks are being accused of looking after their overseas shareholders at the expense of local jobs and the New Zealand economy.

The bank workers' union FINSEC says huge dividends have been handed out while jobs are being cut or contracted out  to offshore operators.

Spokesman Andrew Campbell says he is also unhappy at wage freezes and branch closures. He believes ANZ National is the biggest offender.

Campbell says it's time the government got tough over what he calls an immoral disregard to the local economy. He says all through the recession the banks have been turning healthy profits.