Banks are holding on to their money, so why is the Government so generous with ours?
Businesses need money to grow. I think. Actually, I just made that up. Although I have a few extensive areas of specialist knowledge - two-letter words in Scrabble, making cottage pie, that sort of wheeze - this isn't one of them. But I'm going to write about it anyway as it strikes me as quite important. Possibly even more important than gym memberships and sunbeds - two recent areas of abiding concern to the Commerce Commission.
Then again, what would I know? But I do know a business chum of mine went to the bank to extend his overdraft. He talked to the bank manager for an hour - poor fellow, maybe they were swapping cottage pie recipes - but then the bank manager said he doesn't make the decision anyway. I suspect it gets decided by a computer algorithm. I also know that this month ASB Bank reported a profit of almost $570 million, up by more than a quarter on the previous year. Its lending was down 1.2 per cent on the previous year.
And I couldn't help noticing last week the Government handed out $50 million in Technology Development Grants, including almost $6 million for research and development to NextWindow, a Canadian-owned company. Also, last week in Britain, the Telegraph reported there is concern that banks there failed to meet their half-year small-company lending targets. "Small-company lending targets"? Ever heard of them? Not here, I haven't.
In June the Reserve Bank ordered trading banks to tighten their credit criteria for farm lending. So presumably they could just change their algorithm for small-business lending, too, if they wanted to.