I was in town for a meeting earlier in the week, and walking along Lambton Quay I noticed this gigantic advertisement adorning the wall of an office building.
I’ve always quite admired TSB, as the little bank that could. When I paid more attention to these things, they seemed to have innovative products, good technology, and had to stand on their own feet. Oh, and there was the feisty CEO who once told visiting central bankers worrying about pandemic risks and bank preparedness that in New Plymouth they had bigger risks to worry about, turning around as he spoke and pointing out the window at Mt Egmont, which will erupt again.
I guess they have always played the “local bank” line in their marketing to some extent, but it was the brazenness of that billboard that astonished me. Both the message and, even more so, the location. This is central Wellington, and if there is any sort of “ground zero” for commitment to an open outward-oriented economy surely it must be here. Much as I dislike the word, New Zealand’s “globalists” disproportionately live and work here. Within a radius of a couple of hundred metres from this billboard you capture Treasury, MBIE, the Reserve Bank, MFAT, the Ministry for Primary Industry, and the Productivity Commission. Why, the “right-wing” business think-tank the New Zealand Initiative is just over the road – Eric Crampton and Oliver Hartwich must just be grateful the billboard faces away from their offices and they don’t have to see this crass effort every time they look out the window.
Perhaps Gabs Makhlouf, Brook Barrington, Adrian Orr et al don’t get out for a lunchtime walk, but their minions do and they must be the target audience for this billboard – Lambton Quay is always at its busiest at lunchtime.
And firms spend money on marketing presumably because they believe it will work – “work” in this context presumably being drawing in new customers (unless it is just designed to court more Shane Jones Provincial Growth Fund goodies for Taranaki – TSB being owned by a community trust.) Are Wellingtonians really going to be swayed by this sort of crude nationalism and economic illiteracy. It scares me a bit if so.
I didn’t move to Korea and yet the screen I’m typing to was made by a Korean company, and the profits from its design and manufacture presumably accrued to the owners of Samsung. I didn’t move to the United States, and yet the platform this blog uses is (I think) American, and the profits from what I pay for using it accrue to the owners of that company. One could go on – the car, the printer, the TV, the bottle of French wine, or those Californian oranges in the fruit bowl. The jersey I’m wearing is American and the books on the shelves next to me are from all over the Anglo world – there will (producers hope) have been profits associated with each of them. And although there probably isn’t much profit involved, my morning newspaper is produced by an Australian-owned company. And yet, like 400000+ others I live in Wellington.
It is trade, and it is a good thing – usually mutually beneficial, and if there are occasional exceptions to that presumption, you wouldn’t expect them to be successfully highlighted down Lambton Quay (even if too many public servants are all too keen on the possibilities of clever government interventions in our lives). I didn’t move to Australia, and yet the shareholders of ANZ invested some of their savings to provide banking services to New Zealanders like me. That was good of them – in fact the earliest progenitors of ANZ were setting banking services here in 1840 (10 years earlier than the founding of what became TSB) when there wasn’t much organised here at all. The profits from those transactions accrue to the shareholders (many but not all of whom are in Australia), because they provide the risk capital that underpins the business. And while the TSB talks of the profits “moving to” Australia, in fact successful businesses – that find willing purchasers of their services – typically reinvest many of the profits in the business, right here in New Zealand. Banking is a big business – some might think too big and views will differ on that, but that isn’t the line TSB is running – so it takes lots of capital. That will, often or even typically, mean generating quite large profits – the returns on that capital.
(Although it is a bit of a distraction, one could note that of the five New Zealand owned banks, four are directly capital-constrained by their ownership structures – Kiwibank being government-owned, TSB owned by a community trust, and SBS and Coop being a (modestly-sized) mutuals – and only one of the NZ-owned banks manages a credit rating better than BBB. Not one of those institutions could even begin to displace the major players, and the risks facing New Zealand would increase if they were to try.)
TSB’s billboard proclaims to sophisticated (as they like to think) Wellingtonians that TSB is “proudly supporting New Zealand”. This sort of crass attempt to play some sort of crude nationalist card supports no one other than themselves – and perhaps the Shane Jones-isation of New Zealand politics. It diminishes, and reflects poorly on, those who commission the advert, who surely know better. They should stop trying to gull New Zealanders with some weird autarkic vision that, if followed through on, would be bad for a big country, and totally crazy for a small one.
I once worked for someone who told me his maxim was that from choice he would always use an overseas provider if he could (as I recall this was in the Ansett vs Air NZ days) to keep the pressure on the New Zealand providers to work harder and produce excellent products and services. I never went fully along with him, but having seen that distasteful TSB advert on Tuesday, it actually gave some small pleasure to be in an ANZ branch yesterday and to receive friendly, helpful, accommodating service on the small matter I wanted dealt with. I’d say I’d be happy to have seen the resulting profits accruing to Australian shareholders, but they were so helpful they even waived the small fee on the matter in question – lifetime customer value and all that I suppose.
As for TSB, they really should do better. I hope Wellingtonians passing that big advert look on with disdain, grateful instead for the opportunities that foreign trade and investment – in both directions – created, and continues to create, for New Zealanders. Or would we welcome British consumers being regaled with billboards proclaiming “you didn’t move to New Zealand, so why should the profits on that leg of lamb?”.