Inane crude economic nationalism

I picked up the Dominion-Post newspaper from the front step this morning to find this blaring back at me.

Kiwibank 1

The second page was entirely green, with a little Kiwibank logo and the twee marketing  line “Kiwis backing Kiwis”.  (I guess advertising must have been more expensive in the Herald, where it is “just” wrapped round the sports section).

Rarely had I ever been more glad that I’d never been tempted to shift my banking business to the state-owned Kiwibank.  The crude nationalism on display today was at possibly an even more inane level than the last such NZ-owned bank’s advertising campaign I wrote about

TSB photo.jpeg

That one was on display at the heart of New Zealand’s “globalist-central” (if there were such a place), just over the road from the New Zealand Initiative, and a few hundred metres from places like MFAT, MBIE and The Treasury.   If it had any merit, at least that campaign did have some modicum of substance to it: at least some of the profits of foreign-owned banks are in fact remitted abroad (as the profits –  whether from Wellington, Auckland or wherever – of Taranaki-owned banks are, at least in part, remitted to…..Taranaki).   What of it you might reasonably ask, but at least there is some factual foundation.

But the Kiwibank campaign takes leave of all rational foundation to suggest, quite blatantly, that somehow if you bank with an Australian-owned bank (as most of us do) you are not only disloyal, but actually supporting the Australian rugby team.  How one wonders?  I know it isn’t the cricket season today but isn’t the evil ANZ one of the biggest sponsors of New Zealand cricket?   It is just nonsensical –  all the more so for running wrapped around newspapers produced by two separate foreign-owned and controlled companies.    Are we “disloyal” –  and somehow supporting the Wallabies –  for reading the Dominion-Post?  

From my previous post

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. 

To which I could add the Ecuadorian bananas in the fruit bowl, the Iranian dates I was baking with this morning, and the phone I was using, with componentry from all over the world.  And, of course, there are New Zealand –  the suburban bakery where I picked up the bread for lunch, or the supermarket (which perhaps I’m suppposed to feel even better about because it is part of a co-op, although what I’d prefer was some plastic bags for my groceries.

Most of us rarely give much thought to the nationality of the owners of the companies who produce the products and services we purchase.  No one supposes that owning an Apple phone means we are “supporting” the United States.  Mostly, that makes a great deal of sense (even if those Iranian dates sometimes do make me pause and I wouldn’t be buying a Huawei phone).  I’m glad my bank has been in New Zealand since 1840 – not one of these johnny-come-lately operations –  and that the capital behind it is provided voluntarily by its shareholders (from around the world, if no doubt disproportionately from Australia) rather than taken from taxpayers by coercion to invest in a bank that has struggled to earn a decent rate of return over its life so far and where there is little or no effective accountability for its operations or actions.

I presume Kiwibank has highly-paid marketers who tell them this sort of campaign “works”. Perhaps it plays especially well with politicians like Shane Jones.  But even if it does, it is something that shouldn’t be encouraged.  And the sentiments particularly shouldn’t be indulged/fed or whatever by a wholly state-owned company, whose owners strut the world proclaiming their commitment to open and multilateral trade, rules-based orders, and all that.

 

17 thoughts on “Inane crude economic nationalism

  1. Does that advert break the trades description act? You cannot find 3 million people who do not know the ownership of our main banks. As a keen rugby fan we support our country’s team but we are looking for quality opposition to bring the best out of us. If Australian owned banks are pouring profits into grass roots Australian rugby then that is to be commended.

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  2. You might not like it but many people think that NZ operations are better for NZ than overseas operations. It’s an emotional rather than a rational response but if you’re in a marketing deportment you don’t ignore emotions.

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  3. And, of course, people are free to choose a bank on whatever ground they like (I chose mine on the basis it wasn’t govt-owned and had cool horse ads on TV – this was many many moons ago). But (a) it is crass to suggest most NZers are somehow supporting the Aus rugby team because they don’t bank with Kiwibank, and (b) owners have to bear some responsibility for the words and actions of their companies.

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  4. Seems like an odd target – of all the various forms of nationalism, including a few you buy into yourself, this seems pretty benign.

    Myself, I’ll bank with the bank that gives me the best deal, which looking at current mortgage interest rates, may well be a Chinese bank at this rate when I buy a home.

    But if Kiwibank is an SOE with a mandate to secure a return for its shareholder then I’d expect them to run a campaign with some patriotic appeal if it makes a competent judgement this is in its commercial interest.

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  5. On a side note, do you think it’s likely Kiwibank would have performed better if the dividend the government took was smaller? I vaguely recall hearing criticism of how much they were taking out.

    Another side note, was it wise to sell Postbank and Telecom? I’ve wondered about that. In particular, Telecom’s sale seemed to me to be a huge missed/lost opportunity.

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  6. I don’t think there have been many dividends have there? My impression – I haven’t checked – was that the only material flow back to the govt was when NZPost sold roughly half the bank to ACC and NZSF.

    On your second para, not many govts have chosen to keeping owning/running a state telco, and the price they go for Telecom in 1990 was better than many had expected (so hard to second guess the 1990 judgement with benefit of hindsight). On Postbank, I don’t see the case for state ownership of a retail bank at all – in many ways, creating Kiwibank tho was a reaction (Anderton) to the sale of Postbank and BNZ (and Trustbank I guess)

    My bottom line on Kiwi is that they’ve done less badly than officials probably expected, and for that we should be grateful but we should get out (sell) while we are ahead. No chance of it happening of course, but….

    (I’m quoted to that effect in a Stuff article on Kiwi this morning
    https://www.stuff.co.nz/business/115992087/18yearold-kiwibank-still-has-only-4-per-cent-of-the-market-whats-happened )

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  7. Perhaps the most concerning aspect of these sorts of campaigns is that they might one day be successful, and all around the world! How does NZ look if all those current customers in other countries decide to stop eating food products from NZ because the profits go ‘overseas’? Or only holiday at home for the same reason?

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  8. On JMK’s link “bubble-or-nothing” I have read elsewhere of another ballooning elephant-in-the-room, the manipulation of returns on paid in capital by corporations buying back their own stock. The article JMK refers to points to balance sheets growing faster than income, and consequently a diminishing return on investment I get that, but there seems a double whammy in corporations driving off their shareholders (stock buyback) and often borrowing huge in the low interest markets to fund the process. At some stage economic slow-down will impact revenue but the need to repay debt will not. General Electric is struggling with this and it spent $90 billion on stock buyback. Apple spent $70 odd billion in buybacks and now we see analysts forecasting falling revenue.And now Thos Cook is in trouble and nobody is rushing forward with a fat checkbook (oops, credit card). I ramble on, but the share buyback frenzy has me wondering if this is the trigger for the next crash.

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  9. Not an effective ad campaign in my opinion. Trying to suggest your target customer is in someway disloyal by not doing business with you I would think is a very weak argument and reason to change.
    How many of the 3 million NZer’s after reading that ad would say “Oh I never thought of that, I better go and transfer my business to Kiwibank”
    I look at it and think, “Is that your best shot?”

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