New Zealand prime minister Jacinda Ardern has critcised banks in the country for making profits amid the cost-of-living crisis and said that they are risking losing the “social license” to operate.
“We’ve seen repeated significant profits being drawn by banks in New Zealand. This is not what I would argue as a one-off, we’ve seen this consistently,” Ms Ardern was quoted as saying on Monday during a post cabinet press conference by stuff.nz.
She said that banks need to behave in the correct way by themselves and without government intervention.
“It doesn’t always take government intervention for that kind of self-reflection to occur. It’s time the banks operating in New Zealand did that very thing.”
Ms Ardern’s statement came after Westpac posted after-tax profits of over $1bn. Last week ANZ posted a $2.4bn gain, reported NZ Herald.
New Zealand’s 27 banking companies posted before-tax profits of $9.7bn in the twelve months till June, up from $7.1bn in the twelve months to June 2021, according to the Reserve Bank.
The profits put the banks on track to pass the $10bn-mark next quarter for the first time.
“Are they demonstrating social license and commitment to the communities by taking the profits that they are?” Ms Ardern asked in her briefing.
As the cost-of-living crisis has deepened in the country, Ms Ardern was asked if it there was something wrong with banks making record profits as the country deals with a cost-of-living crisis. to which she said: “Yes.”
The Green Party is demanding that the government do more to redistribute the profit of the banks.
Finance spokesperson Julie Anne Genter said: “Expecting banks … to put people ahead of profit would be a bit like putting the fox in charge of the hen house.”
“When massive corporations like banks can cash in on a change in economic circumstances that they themselves did not bring about, then those benefits should be shared with everyone.”
Ms Ardern however said that the government has not looked at a solution.
“I’m simply being frank with you around my observations around what is occurring with bank profits,” she said. “Do I have a current solution from government on that? The answer is no.”
