Regions suffering under foreign-owned banks - Shane Jones

Shane Jones has lashed out at foreign-owned banks operating in New Zealand, saying they're letting the region down.

The flare-up comes as Mr Jones faces criticism for giving a $9.9 million interest-bearing loan to Westland Milk to make high-value products.

National economic and regional development spokesperson Paul Goldsmith says the loan must be at a rate no bank was willing to offer.

"The Government and taxpayers shouldn't be taking on the role of a bank, especially one that is directly controlled by ministers."

ACT Party leader David Seymour said banks may have decided not to lend the money as it was too risky, meaning taxpayers are now on the line.

"Banks have every incentive to get their investment decisions right because otherwise they go bust, while Shane Jones doesn't face the same constraints."

But Mr Jones told The AM Show the regions are suffering under foreign-owned banks, which lack the Government's "wellness approach".

"Regions like the West Coast have suffered as a consequence of a very narrow banking approach in New Zealand," he said.

"Banks have made money out of New Zealand recently by getting rid of people. I'm in the business of treating investment as growing jobs, and growing the ability of people to create more wealth - that's not what banks do."

Mr Jones isn't sure about the specifics of the relationship between Westland Milk and its bank, but he's sure giving them the loan was the right choice.

"The dairy company said this enables them to grow a lot quicker, to expedited, move up the value chain and that's exactly what we should should be doing in that part of New Zealand."


Contact Newshub with your story tips: