Australian bank under threat?

Press, 5 July 1983, Page 1

Australian bank under threat?

PA Wellington The Prime Minister, Mr Muldoon, side-stepped a question yesterday on whether the Government was seriously considering asking one Australian bank to withdraw from New Zealand.

Mr Muldoon has so far failed to persuade the Australian Government to slacken its investment restrictions on New Zealand companies in Australia. Australia allows only one New Zealand bank to work there.

He had suggested that if New Zealand was to have the same rules as Australia he would have to ask the Australian Government to nominate which trading bank, Westpac or A.N.Z., should leave New Zealand.

When asked at a postCabinet press conference yesterday whether that was merely an example or if there was a chance of its happening, Mr Muldoon gave an expressive shrug. Asked what the shrug meant, Mr Muldoon said, “It means exactly that.” Mr Muldoon said he very much favoured the “more generous treatment” of trans-Tasman investment. “But I finally will have to

accept that if we are going to harmonise these policies it may be that we have to tighten up in respect of Australia, and that doesn’t make much sense.”

He said he was trying to illustrate the ridiculous situation which arose when the Australian policy was that New Zealand should harmonise its investment policy with theirs. “It leads us inevitably to that situation. They permit one New Zealand bank to function in Australia. If we were to harmonise our policy we would permit one Australian bank to function in New Zealand.” Mr Muldoon said the Closer Economic Relations agreement would not work well unless there was a reasonably free flow of investment in either direction. The Bank Officers’ Union said the idea that the Prime Minister could ask one of the Australia trading banks in New Zealand to leave was “deeply disturbing.” Such comments were upsetting to the 6000 employees of the A.N.Z. and Westpac banks said the union’s president, Ms Angela Foulkes.

In the present climate of high unemployment bank

officers had every reason to be worried by Mr Muldoon’s comments. “However ridiculous the Prime Minister regards the possibility, the fact is he has raised it publicly, presumably for some very good reason,” Ms Foulkes said. “If it is merely a bluff, it is in very bad taste as far as employees of the Austra-

lian banks are concerned,” she said.

The Australian High Commission said yesterday that there was no basis for retaliation against New Zealand for its rejection of Australian investment applications before the Overseas Investment Commission. The commission’s commercial secretary, Mr G. C. Spears, said that “there was nothing in the wind” after Mr Muldoon’s decision last week to reject 12 to 15 investment applications held up by New Zealand.

Rejection was necessary to avoid automatic approval under law, Mr Muldoon said then.

Australia had a non-dis-criminatory policy on overseas investment in Australia, and would abide by that, in spite of the New Zealand action, Mr Spears said.