Nicola Willis calls comment from minister Dr Duncan Webb about National's loyalties 'reprehensible'

Nicola Willis says a minister's suggestion that National's loyalties lie with the "big end of town" is a "reprehensible" comment. 

But Consumer and Commerce Affairs Minister Dr Duncan Webb is standing by it.

A proposal from the National Party for the Finance and Expenditure Select Committee, which has a Labour majority, to hold an inquiry into competition in the retail banking sector has been blocked.

The call from Willis had been for a "short, sharp inquiry" to get answers about "the adequacy of competition in our retail banking sector, why increases in interest rate rises for deposits have lagged rate rises for lending, and the impact of new regulations imposed by the Government".

But that won't happen. When asked why not, the committee's chair and Labour MP Rachel Brooking told Newshub: "The ministers are considering the best way to go about doing quite a complicated inquiry."

A market study like the Commerce Commission's inquiry into supermarket competition and fuel prices has also been floated.

Dr Webb, who became the minister earlier this year, on Tuesday morning said National's proposal was voted down as a "quick and dirty study lets the banks off the hook".

"It's the National Party trying to make something once over lightly and that's not good enough... We know where their loyalties lie."

He said those loyalties "lie with the big end of town".

Willis later on Tuesday said that was a "reprehensible comment" and she was "loyal to New Zealanders". 

"As things stand, Duncan Webb has done nothing. I won't be corrected by him when he hasn't initiated any action on this. Where our loyalties lie are with seeing the market is operating effectively, that there is good competition and New Zealanders are getting a fair deal." 

Dr Webb is standing by his comments. 

"We know that the National Party's policies, tax cuts for the rich. They speak for themselves. I am here to look at what we can do for ordinary New Zealanders, those who need it most," he said.

"A Select Committee inquiry would politicise the process. It doesn't have the expertise to do the job. If we are going to look into banks, then we will do it through a market study which has the expertise and the time to do the analysis that is needed to make sure that we get the gains that are there."

Willis said a Select Committee inquiry would get answers fast and interviews with witnesses would be out in public rather than behind closed doors. 

"I can't explain why they won't allow a Select Committee to do its fundamental duty which is to get answers to questions New Zealanders are asking," Willis said.

Dr Webb said earlier that if a market study was agreed for banks, "we want to get the front end right, make sure we get the terms of reference appropriate". 

"We're taking advice from the Commerce Commission and officials on that," he said. 

"It's really important to know where to look, the scope of the inquiry, whether it's into mortgage rates or whether it's a more broad-based inquiry," he said. "We're certainly not going to let the banks off the hook."

Dr Webb acknowledged a market study would take a year or longer.

"But the result would be a thorough understanding of how the sector is working and where it's going wrong."

He wouldn't say what the timeframe was for an announcement. 

"I'm certainly aware of the interest in it and the interest everyday New Zealanders about how much they're paying in bank fees and interest."

Prime Minister Chris Hipkins said no decisions have been made on whether banking could be in the line for a market study, but said it is a candidate.

The ACT Party was also critical of Labour MPs on the Select Committee for not going ahead with the inquiry. 

"Inquiries such as this are very much the job of elected officials," said associate finance spokesperson Damien Smith.

"In Labour's world unelected consultants and bureaucrats are the experts on everything and Members of Parliaments just exist to action their advice. If more advice is needed, maybe it should be supporting the people's elected representatives in Parliament?"

KPMG on Tuesday released a report finding New Zealand banks made a collective record profit of $7.18 billion in 2022 as interest rates rose and margins expanded.