Ten Reasons Why ASB Is A Bad Bank

- Vaughan Gunson

Vaughan Gunson was the Bad Banks Campaign manager in 2009/10. That campaign has been put on the shelf for the moment by the initiator, Socialist Worker, which is now focusing on the Tax Justice Campaign recently launched with the Alliance Party. See Vaughan’s article on that campaign, elsewhere in this issue.

Every week my seven year old daughter does her banking. She takes a few coins out of her yellow elephant “piggy bank” and puts them in an envelope. Thousands of kids around New Zealand do the same thing. Quite normal. Which is, of course, how we understand the banks from early childhood, through our teenage years, and into early adulthood. Banks are OK. They’re necessary. We don’t really think about it that much. But childhood innocence doesn’t last, and neither does our simple relationship with the banks.

The first time you get hit with a penalty for a cheque bouncing shatters some illusions. Trying to pay off that overdraft, which those nice people at the bank gave you, is sobering. And then there’s getting a mortgage. That changes everything. Calculating how much the bank makes out of your interest payments over ten, twenty or thirty years – that makes you angry. Especially when you read in the paper that your bank made quarter of a billion dollars last year. My daughter doesn’t accept it yet, and we’ve had a few talks about it, but the banks are bad. And ASB Bank is one of the baddest. Here are ten reasons why:

1. Interest Gouging Grassroots Kiwi Homeowners
Mortgage holders know it. Even the Reserve Bank in 2009 came out and said that the banks, including ASB, were keeping their interest rates too high (see http://www.nzherald.co.nz/interest-rates/news/article.cfm?c_id=235&objectid=10582846).

2. Foreclosing On People's Homes
2009 saw record numbers of mortgagee sales, as banks moved to protect their own equity position by booting increasing numbers of "mum and dad" mortgage holders out of their homes. The pace of mortgagee sales has continued in 2010. Several thousand homeowners have been foreclosed in Auckland, ASB's home turf, over the last 18 months.

3. Deceiving New Zealanders By Claiming To Be A "Kiwi Bank"
ASB advertisements in late 2009 used the phrase "we've been a KIWI BANK since 1847", when in fact ASB is almost entirely Australian-owned. The phrase cynically seeks to convey the impression that the ASB Bank operates in the interests of New Zealanders, when its corporate practices plainly tell another story (see http://www.nzherald.co.nz/sideswipe/news/article.cfm?c_id=702&objectid=10604600).

4. Mega-scale Tax Dodging
ASB bosses tried to get away with not paying $285 million of tax from the period 2001-04. Fortunately the Inland Revenue Department got most of it back after taking the banks to court.

5. Continuing To Make Massive Profits At The Expense Of Grassroots People
The recession of 2008/09 did not prevent ASB making a big profit, $332 million. Such a high profit in a recession points to the power the bank has to shift the burden of economic hard times on to ordinary New Zealanders. While ASB’s unpaid tax bill wiped out profits in the first half of the 2009/10 financial year, the bank has continued to prosper in 2010.

6. Failing To Face Up To Public Scrutiny
Nobody from ASB fronted up to the Parliamentary inquiry into the operations of the banks organised by the Green, Labour and Progressive parties in 2009. While this inquiry had no teeth, because it was not supported by the National government, this disregard for the New Zealand public showed how arrogant and conceited is the position of the Aussie-owned banks.

7. Union Busting
The ASB Bank has determinedly used anti-union practices to stop Finsec Union from organising bank workers.

8. Imposing A Wage Freeze On Workers
In 2009, ASB Bank employees earning over $50,000 were informed that they will be subject to a wage freeze. This will affect 3,500 of the bank's 4,700 staff. The low bar compared unfavourably with that being used by ASB's parent company in Australia, Commonwealth Bank, where the wage freeze was for staff earning over $100,000 (see http://finsec.wordpress.com/2009/04/24/asb-bank-freeze-staff-wages-%E2%80%93-no-union-members-to-stop-it/).

9. Cutting Funding To Community Groups
Just when many community organisations needed it most, to deal with the human fallout of the recession, ASB Bank, through its ASB Charitable Trust, froze grants for six months in 2009. This is despite continuing to make big profits (see http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10603631).

10. Using The Media To Frame Public Debate In A Way That's Advantageous To Banks
Any search of news Websites like NZ Herald or Stuff News for "ASB" reveals just how often spokespeople for the bank are in the media. The bank produces a constant stream of statements and commentary on economic indicators, which are clearly designed to frame media debate on economic issues in a way that's favourable to banking operations.

ASB Bank is powerful and cunning organisation. Confronting that power is going to take some cunning on our part. We need to think of how we can build popular campaigns that force changes in the way banks are currently allowed to operate in this country. They certainly don’t serve us well now. If you’ve got any ideas, I’d like to hear them. Email me at svpl@xtra.co.nz

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Foreign Control Watchdog, P O Box 2258, Christchurch, New Zealand/Aotearoa. August 2010.

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