But this week we are going back to the balmy days of late last week when the House, in its final hour of business before adjourning, held a special debate on the report of the finance and expenditure committee on its inquiry into banking competition.
The timing was somewhat exquisite; a few days after the MPs did their thing a couple of the major banks did their thing - releasing annual reports with profits that would make Croesus blush.
While this would no doubt delight their shareholders, those paying the bank fees and interest that contribute to those neon-bright bottom lines might not be quite as overjoyed.
The committee, which reported back in August, held a two-track hearing process; F&E concentrated on corporate and urban banking while the primary production committee was asked to take a major part in investigating the rural banking sector.
Given that a rural banking inquiry was something which New Zealand First had asked for and secured as part of its coalition agreement, this was not an inconsiderable task.
And the primary production committee took it very seriously, Waitaki National MP Miles Anderson told the House, carefully reading a well-prepared speech.
It had sought to understand the challenges faced by rural customers, the impact of regulatory change, and the role of banks in supporting sustainable rural prosperity: ‘‘We concluded that improvements were required,’’ he said.
In particular, the committee wanted to see the Reserve Bank review rural lending capital requirements, that it order banks to disclose factors used to calculate loan rates, and that the Reserve Bank require banks to have greater clarity around natural hazard and climate-related disclosures.
The capital requirements matter was a major one, Anderson said.
Since 2022 the Reserve Bank had told banks that if they wanted to lend to farmers - whose income is prey to seasonal variations and unseasonable weather - that the borrowing cockies needed to put up greater capital to secure their loan.
In city slicker terms, a rough equivalent would be being told that you would need to put down a 30% deposit on your new home rather than 20%.
‘‘Since these capital requirement changes, rural lending growth has slowed relative to other sectors, and interest rate margins on rural loans have widened compared to residential lending,’’ Anderson said.
‘‘The Reserve Bank reports that the new capital requirements have added between 0.91 and 1.17% to rural loans, which is adding between $515 and $712m in rural interest repayments annually.’
As Anderson said, that was money that could be spent on the farm or in local communities.
And at half a billion and counting, that’s more than enough money to add up to something real and concerning, rather than being something that can be dismissed as farmers having a whinge.
Furthermore, some farmers believe that the capital requirements are a cover for hiking the cost of all rural lending.
Banks would argue not, but Anderson and the committee were concerned that no-one seemed be looking into whether this was the case, or not.
‘‘While the Reserve Bank was incrementally raising capital requirements, the banks, it would seem, went to the maximum from the outset.’’
‘‘Transparency in lending practices was also as significant concern for rural customers. Many submitters noted that loan terms, rate setting methodologies, and risk assessments are often opaque, leaving borrowers uncertain about the fairness and competitiveness of their banking arrangements. Our recommendation for improved disclosures and communication is designed to address these concerns.’’
Soon after, Act New Zealand’s representative on F&E, Southland list MP Todd Stephenson exuberantly sprang to his feet to make his contribution.
‘‘I do think we actually did a very good job in the end over the year bringing it together,’’ he trilled, not at all modestly.
‘‘I would encourage people to pick up the report, the recommendations are upfront. It’s quite logical to follow.’’
Of those recommendations, 14 of the 19 were unanimous; a more than respectable 73% strike rate, he said.
‘‘I think that’s actually a real credit to where we could actually find that common ground. I want to acknowledge members from across the House that are on the committee, because we actually had some really great discussions, some robust discussions.’’
For Stephenson, the recommendation which stood out was the requirement for greater clarity around interest rates connected to any natural hazards, climate related disclosures, and green lending products.
‘‘We just need lenders, particularly rural lenders, to understand what is contributing to the costs when they are borrowing and lending money. So it was good to get that recommendation on the record.’’
Another thing which he hoped would ensue from the inquiry was the emergence of ‘‘innovative niche players’’ to compete against the four big banks and Kiwibank.
‘‘We actually want to get more of that innovative product, so rather than - of course, I’m from Act so you’d expect this - the State stepping in and taking over banking, we actually just want to make sure that we can get more innovation and unique products.’’
Which all sounds well and good, but the kicker - as Stephenson pointed out - is that this report is not intended to gather dust. Both F&E and the primary production committees have committed to regular sessions with the banks and other players to gauge progress on the report’s recommendations.
‘‘It’s not just a report that’s one and done. We will be putting this into our work programme, and we look forward to following up on it and actually making this continue to live.’’
And that’s a political promise you can bank on - especially as on Thursday Finance Minister Nicola Willis said that the government would accept or partially accept all the recommendation in the report and ordered Treasury to monitor that.
