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