It was a proud moment for the country when 20 years ago the Bank of the Cook Islands (BCI) began operations following the merger of the Cook Islands Development Bank and the Post Office Savings Bank. Yet high interest rates continue to plague borrowers in the Cook Islands, writes Opposition leader Tina Pupuke Browne.
The Bank of the Cook Islands has long advocated itself as
the “people’s bank” because in truth, the BCI belongs to the people of the Cook
Islands, and we have understood it to be a bank, that served us, provided us
with banking facilities and products that are advantageous to Cook Islanders,
putting the financial needs of our Cook Islands people’s first before profit.
And yet we ask the question, what is one of the most
pressing financial needs of so many households and individuals here in the Cook
Islands? Loans and interest rates set by banks to pay back those loans.
What would remedy this is a significant reduction of the
crippling interest rates charged by our nation’s bank, which along with the two
other commercial banks here, rank amongst the highest in the Pacific. We have a
bank which is owned by the people of the country – it is our money that creates
the BCI’s profits, which then go into the coffers of government and help
finance infrastructure, education, health, police, community programmes chosen
by the bank and its Board.
Since the establishment of BCI, many people, especially
those with loans at our nation’s bank, have had crippling difficulty with the
high interest rates it charges for every different type of loan. The Covid
pandemic, has made the pain of these interest rates even worse. The time has
come to challenge the excuses to protect these high interest rates that those
who sit on the board of BCI and in its management have made, particularly now
when government financial support is about to stop.
Is it time that BCI understood what it is to be the people’s
bank and offer our people interest rates that aren’t debilitating, interest
rates that don’t punish the pay packets of ordinary Cook Islanders, and
interest rates that help our people get ahead? Whether it be in business or to
simply diversify away from tourism, diversification is paramount for our
long-term economic survival as the effects of Covid-19 will be around for
several years. Things will not go back to any kind of normal anytime soon, as
far as tourism is concerned, and why our peoples bank, our nation’s bank has a
pivotal role in turning our asset rich but capital poor country around.
And what better time to implement a fair interest reduction
than now, when so many people have been affected by the economic downturn and
are struggling. Struggling even before they try to service their debt
responsibilities at BCI, and what better time for BCI to give back to our
people who have supported the bank for the past two decades by offering reduced
interest rates, when the national bank celebrates 20 years of operations.
BCI is 100 per cent owned by the government, a government
that is supposed to serve the people. And in this instance, there is an urgent
need for the government to flex some muscle, to think outside the square and
direct BCI to adjust interest rates to be more manageable and fair to our
people. Simply put, charging the same rates as the two other foreign commercial
banks in the country is not being a “people’s bank” – BCI cannot and should not
expect to operate the same as the commercial banks whose sole aim is to make
profits for its shareholders. BCI shareholders are the people of this country,
and surely after two decades of operations and being patronised by our people,
the national bank can surely consider giving back to our iti tangata that have
faithfully built this bank to where it is today.
Giving back to the people after 20 years would be
appreciated and remembered by thousands – as well as reduced interest rates.
BCI board members, our people and our Board members would do well to remember
when they authorise the expenditure of bank profits to government, that they
are agreeing to the people’s money being spent, not the banks’ money – the
peoples’ money on whatever it is they decide.
Sadly, this Government’s public position is that it should
and will continue spending without restraint, and spend they continue to do on
themselves and their projects for political gain. They may do well to remember
also that the money they spend is not their money – it is also the people’s
It is my view as Leader of the Democratic Party and those of
our Party that too much of the spend the Government continues to do is on
unnecessary, on non-priority areas – and for political gain. Cook Islanders and
especially those in the private sector all know that this is not the time to be
splashing out and is instead a time for financial prudence.
Instead, it is a government that is borrowing, borrowing,
borrowing, aue te mataku e, money to keep its voters and base happy while our
iti tangata and business owners trim and cut back wherever they can to simply
survive. Maintaining the current spending levels by this Government is
foolishness as it is just not sustainable as they accumulate a mounting debt
your children and children’s children will inherit and have to pay.