Reserve Bank picks taxpayer’s pockets to boost commercial bank profits
05 October 2022
by Chris Leitch, Leader
The Reserve Bank is digging deeper into taxpayers pockets to increase the profits of investors and commercial bank shareholders with today's lifting of the Official Cash Rate.
That OCR rise will see the bank (read taxpayers) paying the commercial banks 1.5 billion per year in interest payments on their settlement/reserve accounts.
Those accounts are where the banks hold money people have deposited with them while they lend out created money to borrowers.
Taxpayers will also pay more interest on the massive amount of borrowing the government has undertaken over the last couple of years - again transferring wealth into the hands of the mostly American shareholders of the Australian based banks.
In addition, by lifting the OCR the Reserve Bank has allowed the commercial banks to inflict more pain on businesses and mortgage borrowers with higher interest rates - again transferring wealth to overseas bank shareholders.
That triple whammy will put more pressure on the country's balance of payments as taxpayer money is shuffled offshore as profits to those shareholders.
That taxpayer money should have been spent on nurses and doctors, teachers, getting people out of motels and into houses, putting food on the tables of starving kids, and making sure the police have the resources to deal with gang violence and ram raids.
Instead of copying what other central banks are doing our central bank could have been innovative and adapted its Funds For Lending programme to provide money for the commercial banks at zero interest provided those banks made a significant cut in lending rates on working capital for businesses, provided low interest loans to businesses for new technology to increase productivity, and funded start-ups to produce much more of what New Zealanders need right here to reduce the country's reliance on imports.
Instead it has chosen to put the interests of overseas investors and bank shareholders ahead of the interests of the majority of New Zealanders.