The NZ taxpayer is taking full control of Kiwibank in a transaction that will see the Government buying out existing owners NZ Post, NZ Super Fund and ACC - a deal that values the Kiwibank parent company at about $2.1 billion.
A shuffle of the shareholding of Kiwibank's parent company Kiwi Group Holdings (KGH) has been looming since early this year.
The Crown acquisition was announced by Finance Minister Grant Robertson on Monday.
“While the Crown essentially owned KGH through Crown-owned entities, an ongoing shareholding in Kiwibank did not fit NZ Post’s and ACC’s long term strategic and investment plans," Robertson said.
"NZ Super Fund had been interested in purchasing a majority holding in KGH, but withdrew its interest as it did not align with the Government’s commitment to public and New Zealand ownership," he said.
In a separate statement NZ Super Fund chief executive Matt Whineray said: “We initially considered buying some or all of NZ Post’s stake and discussed this matter with the Government, but ultimately weren’t able to get agreement on two key issues relating to the asset. Specifically, we sought the flexibility to introduce private sector capital and governance capabilities into the business, and as a wholly-commercial investor we sought to preserve all options for exiting the investment in the future.
“These requirements understandably did not fit with the Government’s objective for the ownership of Kiwibank.”
Robertson said the process of acquisition is "a straightforward transfer of assets" and it will not change the overall value of the Crown’s consolidated balance sheet.
"It does require the government to fund its contribution for the purchase, which will be done through the multi-year capital allowance. This means the cost to purchase is already part of the borrowing programme published at Budget 2022."
Kiwibank and NZ Home Loans will continue to operate independently and "at arm’s length from the Government", Robertson said.
The Crown’s ownership of KGH will be expressed through a newly incorporated Schedule 4A company, Kiwi Group Capital (KGC) with a separate board.
The Government is fully committed to supporting Kiwibank to be a genuine competitor in the banking industry – "ensuring the bank has access to capital to continue to grow on a commercially sustainable basis and offer a viable and competitive alternative for New Zealanders," Robertson said.
Kiwibank chief Executive Steve Jurkovich said the announcement would enable Kiwibank, the biggest New Zealand-owned bank, "to continue to deliver on its growth ambitions and have even more impact for its people, customers, and Aotearoa".
“The key to having a positive long-term impact is remaining focused on being competitive and balancing performance and purpose. The refreshed arrangements will ensure a continuance of good governance and ownership stability."
The announcement follows the sale exactly a week ago by Kiwi Group Holdings of funds management business and KiwiSaver default fund provider Kiwi Wealth to Fisher Funds for $310 million.
Also last week Kiwibank announced that annual profit rose to a record high as income surged and the bank grew lending faster than system, or market-wide, growth. It said June year net profit after tax rose $5 million, or 4%, to $131 million from $126 million in the year to June 2021. The bank's previous record annual profit was $127 million in 2015.
Kiwi Group Holdings is currently owned by New Zealand Post, the Accident Compensation Corporation and the NZ Superannuation Fund after ACC and the Super Fund bought in back in 2016.
When announcing that the ownership of KGH was up for discussion earlier this year, a spokesperson for Robertson then said that since 31 October 2021, any shares offered by any Kiwi Group Holdings shareholder and not taken up by other existing Kiwi Group Holdings shareholders would be available for the Crown to purchase directly.
The 2016 deal saw the NZ Super Fund invest $263 million for a 25% stake, and ACC $231 million for a 22% stake, valuing Kiwi Group Holdings at $1.050 billion. NZ Post retained 53%.
This is the Statement from Grant Robertson:
The Government has acquired 100 percent of Kiwibank’s parent company, Kiwi Group Holdings (KGH), ensuring the bank remains fully Kiwi-owned.
KGH, which also operates New Zealand Homes Loans, had been owned by NZ Post, ACC and the NZ Super Fund. Under the terms of the agreement when ACC and NZ Super Fund became shareholders in 2016, the Government had first right of refusal over any future sale of shares.
“The transaction ensures Kiwibank remains 100 percent Kiwi-owned, a bottom line pledge that the previous National Government also made in 2016 when the current ownership arrangements were entered into,” Finance Minister Grant Robertson said.
“While the Crown essentially owned KGH through Crown-owned entities, an ongoing shareholding in Kiwibank did not fit NZ Post’s and ACC’s long term strategic and investment plans. NZ Super Fund had been interested in purchasing a majority holding in KGH, but withdrew its interest as it did not align with the Government’s commitment to public and New Zealand ownership.
“The Government is grateful for the investment and support given to KGH from the departing shareholders over the past 20 years. Their contribution and commitment, particularly collectively since 2016, has set Kiwibank up strongly for future growth.
“The new ownership structure simplifies our ability to fully support Kiwibank to meet its future potential. The transaction is subject to regulatory approval by the Reserve Bank.
“The Government is fully committed to supporting Kiwibank to be a genuine competitor in the banking industry – ensuring the bank has access to capital to continue to grow on a commercially sustainable basis and offer a viable and competitive alternative for New Zealanders.
“This is a win-win for the Crown, Kiwibank and for New Zealanders.
“Kiwibank and NZ Home Loans will continue to operate independently and at arm’s length from the Government. The Crown’s ownership of KGH will be expressed through a newly incorporated Schedule 4A company, Kiwi Group Capital (KGC) with a separate board.
“The transaction values KGH at $2.1 billion. The process of acquisition is a straightforward transfer of assets and it will not change the overall value of the Crown’s consolidated balance sheet. It does require the government to fund its contribution for the purchase, which will be done through the multi-year capital allowance. This means the cost to purchase is already part of the borrowing programme published at Budget 2022.
“I want to be clear that this will be business as usual for both Kiwibank and New Zealand Home Loans staff and customers.
“With Kiwibank staying in New Zealand hands, New Zealanders can continue to bank with a trusted, credible and competitive banking option that will remain fully locally owned. With a significant commitment from the Crown to invest in the bank’s future success, Kiwis can be assured Kiwibank has a very bright future,” Grant Robertson said.
This is the announcement from NZ Super Fund:
The Guardians of New Zealand Superannuation, the Crown entity that manages the NZ Super Fund, confirmed today it will accept the Crown’s $527 million offer for its 25 percent shareholding in Kiwi Group Holdings Ltd (KGHL), which owns Kiwibank and New Zealand Home Loans.
NZ Super Fund Chief Executive Matt Whineray said the Crown’s offer presented a fair and attractive opportunity for NZ Super Fund to realise its six-year investment in the company. The transaction is subject to regulatory approval by the Reserve Bank of New Zealand - Te Pūtea Matua.
“Kiwibank has performed well during the time we have been a shareholder and we believe our involvement played a crucial part in kickstarting that growth. Kiwibank is in good shape, has excellent leadership and strong prospects for the future,” says Mr Whineray.
“We initially considered buying some or all of NZ Post’s stake and discussed this matter with the Government, but ultimately weren’t able to get agreement on two key issues relating to the asset. Specifically, we sought the flexibility to introduce private sector capital and governance capabilities into the business, and as a wholly-commercial investor we sought to preserve all options for exiting the investment in the future.”
“These requirements understandably did not fit with the Government’s objective for the ownership of Kiwibank.”
Mr Whineray says as the NZ Super Fund matures it will continue to sell as well as buy investments in New Zealand, in line with its independent commercial mandate.
“We continue to work to identify suitable domestic investments that meet the Fund’s commercial requirements while delivering environmental and social benefits.”
The NZ Super Fund purchased its stake in KGHL from NZ Post in 2016 for $263m and invested a further $61.75m in 2017. The investment has earned the Fund a return of more than 10 percent per annum.
The NZ Super Fund has more than $8 billion invested in New Zealand, with substantial exposures to technology, financial services, healthcare, land and housing development, timber, rural land, listed equities and both small and large privately-owned companies.
Earlier this year, the NZ Super Fund announced it would partner with Copenhagen Infrastructure Partners to explore the potential for large-scale offshore wind energy in the South Taranaki Bight.
This is the announcement from Kiwibank:
Kiwibank today welcomed the news that it would remain in public ownership, with the Government announcing that, subject to regulatory approvals, it has acquired 100 percent of Kiwibank’s parent company Kiwi Group Holdings.
Chief Executive Steve Jurkovich said the announcement would enable Kiwibank, the biggest New Zealand-owned bank, to continue to deliver on its growth ambitions and have even more impact for its people, customers, and Aotearoa.
“The key to having a positive long-term impact is remaining focused on being competitive and balancing performance and purpose. The refreshed arrangements will ensure a continuance of good governance and ownership stability.
“Our success in two short decades since we opened for business is remarkable. Over one million customers and 40 thousand businesses have joined us because they want to bank with a New Zealand-owned bank where 100 percent of our profits stay right here in Aotearoa. But there’s a lot more we want to achieve.”
Mr Jurkovich acknowledged the investment and support of the departing shareholders – NZ Post since the bank’s inception in 2002, and ACC and the NZ Super Fund since 2016.
“Their contribution is a big part of our history, and they leave the bank in a strong position,” he said.
“We look forward to working constructively with the Government under our new ownership structure to deliver on our Purpose: Kiwi making Kiwi better off.”
Mr Jurkovich said the bank would continue to operate independently and at arm’s length from the Government, with its own Board.
He said customers didn’t need to do anything following today’s announcement, and they could take comfort that Kiwibank was here to stay for the long-term.
“We remain focused on providing expertise around the products and services that make Kiwi better off. We believe the stability and support offered by today’s announcement will strongly support our goal of being the first choice in banking for customers.”
136 Comments
As opposed to corrupt capitalism and manipulated markets as it is?
What foreign investment did the superfund think KB needed, heaps for freshly printed cash to inflate the share price? Some bs expertise that we can't acquire?
I'd much prefer the NZ government out of our education system. Selling our assets to investors who own printing presses is not on my list.
When you start going down the road where there is no incentive to work hard, or to save money, because you have a government like our Greens/Labour one, who are so obsessed with leveling up wealth that they drive people out of the country because why live here to be taxed to the hilt.
All incentives to do well in life are removed, and you're better off just spending up any money you have, or otherwise you will be taxed out of it.
This is a complete non-story. Kiwi Bank is already viewed as State owned, this restructure has taken place because NZ Super wanted to do more with it and bring in external investors. Since they do not want to be a passive shareholder, the Crown has bought them out.
Nothing is going to change, there is no new strategy, no new capital.
That would be nice. But "independently operated" means the government can't set the strategy. I'd hazard a guess the SOE Act wouldn't let Kiwibank operate that way. A pity. Because undercutting ANZ and stealing market share would be a viable way of making a profit, albeit a risky one, but see point 2.
Having worked for a schedule 4a Crown Company I can assure you that individuals with the shareholding Ministry controlling the entity at arm's length are not without their levers to drive the agenda.
Sure they say that are apolitical, but the Minister of Treasury? Finance? Will set the tone that is expected to be followed.
So at arms length, but not out of reach.
The rate of interest – the price of money – is said to be a key policy tool. Economics has in general emphasised prices. This theoretical bias results from the axiomatic-deductive methodology centring on equilibrium. Without equilibrium, quantity constraints are more important than prices in determining market outcomes. In disequilibrium, interest rates should be far less useful as policy variable, and economics should be more concerned with quantities (including resource constraints). To investigate, we test the received belief that lower interest rates result in higher growth and higher rates result in lower growth. Examining the relationship between 3-month and 10-year benchmark rates and nominal GDP growth over half a century in four of the five largest economies we find that interest rates follow GDP growth and are consistently positively correlated with growth. If policy-makers really aimed at setting rates consistent with a recovery, they would need to raise them. We conclude that conventional monetary policy as operated by central banks for the past half-century is fundamentally flawed. Policy-makers had better focus on the quantity variables that cause growth. Link
Fannie Mae and other US GSEs purchase bank mortgages and securtitise them . This in effect offers banks and investors a government guarantee underwritten by all taxpayers, even those renting.
Wealth effect or wealth illusion? The other therapeutic effect of lower-for-longer interest rates is the wealth effect. By driving up the value of future cash flows with lower rates of interest, all manner of assets – stock, bonds, and houses – increase in value and, thereby, can stimulate our marginal propensity to consume. More simply put, the imperative was to make rich people richer so as to encourage their consumption. It is not so hard to imagine negative side effects.
There are the obvious distributional effects between those who have assets and those who do not. Returning house prices in California to their 2005 levels may be good for those who own them, but what of those who don’t?
There are also harder-to-observe distributional consequences that flow from the impact of lower-for-longer interest rates on the value of our liabilities. This is most easily observed in pension funds.
Consider two pension funds, one with a positive funding ratio and one with a negative funding ratio. When we create a wealth effect on the asset side of their balance sheets we also drive up the value of their liabilities. Lower long-term interest rates increase the value of all future cash flows – both positive and negative. Other things being equal, each pension fund will end up approximately where they started, only more so.
The same is true for households but is much more ominous, given the inequality of wealth with which we began the experiment. Consider two households: one with savings and one without savings. Consider also not just their legally-defined liabilities, like mortgages and auto-loans, but also their future consumption expenditures, their liability to feed and clothe themselves in the future.
When the Fed engineered its experiment to promote the wealth effect, the family with savings experienced an increase in the present value of their assets and also an increase in the present value of their liabilities. Because our financial assets are traded in markets and because we receive mutual fund and retirement account statements, we promptly saw the change in the value of our assets. We are much slower to appreciate the change in the present value of our liabilities, particularly the value of our future consumption expenditures.
But just because we don’t trade our future consumption expenditures on the stock exchange does not mean that the conventions of finance do not apply. The family with savings likely ends up where they started, once we consider the necessity of revaluing their liabilities. They may more readily perceive a wealth effect but, ultimately, there is only a wealth illusion.
But what happened to the family without savings? There were no assets to go up in the value, so there is no wealth effect – real or perceived. But the value of their future consumption expenditures did go up in value. The present value of their current and expected standard of living went up but without a corresponding and offsetting increase in assets, because they don’t have any. There was no wealth effect, not even a wealth illusion, just a cruel hoax.
https://www.grantspub.com/files/presentations/FISHERGRANTSREMARKS15MAR17...
So am I to infer that artificially keeping interest rates low for home loan borrowers by a government negatively affects the non-savers (poor) in terms of increased prices for goods and services? Your referenced article seems to talk about the subject in a macro sense. Has there been any research regarding government controlled low interest rates for home load borrowers only? Whilst the productive economy operates as per normal? I remember in the past in NZ government loans with low interest rates to certain borrowers (Maori Affairs loans being one).
On our planet earth – as opposed to the very different planet that economists seem to be on – all markets are rationed. In rationed markets a simple rule applies: the short side principle. It says that whichever quantity of demand or supply is smaller (the ‘short side’) will be transacted (it is the only quantity that can be transacted). Meanwhile, the rest will remain unserved, and thus the short side wields power: the power to pick and choose with whom to do business. Examples abound. For instance, when applying for a job, there tend to be more applicants than jobs, resulting in a selection procedure that may involve a number of activities and demands that can only be described as being of a non-market nature (think about how Hollywood actresses are selected), but does not usually include the question: what is the lowest wage you are prepared to work for?
Thus the theoretical dream world of “market equilibrium” allows economists to avoid talking about the reality of pervasive rationing, and with it, power being exerted by the short side in every market. Thus the entire power dimension in our economic reality – how the short side, such as the producer hiring starlets for Hollywood films, can exploit his power of being able to pick and choose with whom to do business, by extracting ‘non-market benefits’ of all kinds. The pretense of ‘equilibrium’ not only keeps this real power dimension hidden. It also helps to deflect the public discourse onto the politically more convenient alleged role of ‘prices’, such as the price of money, the interest rate. The emphasis on prices then also helps to justify the charging of usury (interest), which until about 300 years ago was illegal in most countries, including throughout Europe.
However, this narrative has suffered an abductio ad absurdum by the long period of near zero interest rates, so that it became obvious that the true monetary policy action takes place in terms of quantities, not the interest rate.
Thus it can be plainly seen today that the most important macroeconomic variable cannot be the price of money. Instead, it is its quantity. Is the quantity of money rationed by the demand or supply side? Asked differently, what is larger – the demand for money or its supply? Since money – and this includes bank money – is so useful, there is always some demand for it by someone. As a result, the short side is always the supply of money and credit. Banks ration credit even at the best of times in order to ensure that borrowers with sensible investment projects stay among the loan applicants – if rates are raised to equilibrate demand and supply, the resulting interest rate would be so high that only speculative projects would remain and banks’ loan portfolios would be too risky.
It is for this reason that we need the right type of banks that take the right decisions concerning the important question of how much money should be created, for what purpose and given into whose hands. These decisions will reshape the economic landscape within a short time period.
Moreover, it is for this reason that central banks have always monitored bank credit creation and allocation closely and most have intervened directly – if often secretly or ‘informally’ – in order to manage or control bank credit creation. Guidance of bank credit is in fact the only monetary policy tool with a strong track record of preventing asset bubbles and thus avoiding the subsequent banking crises. But credit guidance has always been undertaken in secrecy by central banks, since awareness of its existence and effectiveness gives away the truth that the official central banking narrative is smokescreen. Link
Step by step, communism is being introduced into NZ by this government, mixed with divisive wokeism.
I wonder what is going to be next: orthodox Marxism requires ultimate state's ownership of all major financial assets and means of production - Labour is slowly but steadily pursuing this ultimate goal, in the meanwhile making a good part of the population dependent on the state's welfare, in one way or another, inflating its bureaucracy to unseen levels in recent times, and ignoring and trashing local democracy through their centralization push (see three waters, just as an example). Well done, comrade Vissarionovich Jacinda.
Deepstate? haha that's your fantasy, I mentioned nothing about that, just what this Labour/Greens governments polices are, they are knocking on the door of communism.
They want to control the financial systems, and look at the mess they are making of it when they get their sticky fingers into things, racked up billions in debt, changed the way the RBNZ operate, so that now it just prints money and doesn't worry much about inflation.
Caused a massive housing bubble, and they are now causing a housing crash, what a joke.
Now they will burden KB with the same time and cost wasting woke policies they have imposed on the RBNZ.,
Not at all - it's a valuable discussion.
But the use of the term "woke" (like "communism") is incredibly lazy ideological short-hand of limited value that adds nothing to the conversation, whereas stating "requirements that have absolutely nothing to do with banking" does.
Would you like to elaborate on what you think these non-banking criteria might be that you expect to be applied to an arms-length SOE banking operation, governed under legislation?
Here's an example. The government changed the RBNZ's mandate from inflation to inflation, maximum employment, house price stability, and something to do with Maori that I dont understand. Im not surprised that the RBNZ lost sight of inflation. If the government hadn't overreacted so much, and damaged the economy so badly during covid then the RBNZ probably wouldn't have been compelled to expanded it's balance sheet by so much. House prices wouldn't have exploded so much. We wouldn't be in such a terrible position right now. It's all Labour's doing.
So much melodrama. You do realize the house price stability mandate was introduced in February 2021? This was after the LVR's were removed in April 2020, and after the Funding for Lending programme was introduced (late 2020). The damage was more or less done by then, the Government had to step in due to Orr's reckless actions.
Chalk and cheese though.
The RB is explicitly a state institution, not a commercial Crown Entity.
I’d expect by its nature that the RB while notionally independent, is politically responsive. Kiwibank, not so much (at least not more so than Transpower, for example).
Do you prefer crony capitalism (Washington Consensus) where profits are privatised and losses socialised?
Or Kiwis paying for the losses, which is probably what will happen if it's run by this government, banking will become the last of their priorities, behind a long list of woke requirements, like they have done to the RBNZ, and you still think they will make money?!
"Or Kiwis paying for the losses, which is probably what will happen if it's run by this government..."
Here's the thing; history would tell us that depositors and taxpayers will foot the bill for failure anyway, irrespective of who the owner is.
Note also that it won't be 'run' by the government of the day, any more than any other SOE is.
https://www.examinerlive.co.uk/news/cost-of-living/edf-energy-prices-rise-4-23619286
Take a look at energy prices in the UK and France. Privatised in the UK (prices up 54%) State owned in France (prices up 4%). The irony is, the state owned French Energy company bought a privatised UK one. If that's communism, I want more.
Yes we could learn to be worried about a shortage of river water to cool nuclear nuclear plants. And engineering issues requiring lots of complex maintenance and shutdowns. Their nuclear fleet is currently 55% out of service. EDF had to be nationalised because otherwise it would be bankcrupt.
I don't think the maintenance problems are easily solvable. Yes they are solvable, and they have been picked up and not about to cause a disaster, but if they were 'easy' to solve you wouldn't see half the nuclear fleet taken out of service at the same time, and at the same time as there's an energy crises. France is lucky it is in Europe and can import electricity from it's neighbours otherwise they would be rationing electricity right now.
Production from the French nuclear fleet has also been affected by ongoing maintenance at half of the countries 56 reactors. At least some of the maintenance was spurred by the discovery of stress corrosion cracking on the Civaux Unit 1 reactor at the end of 2021.
Running fine?
https://www.powermag.com/nuclear-power-production-curtailed-in-france-w…
the Waikato is in flood 11 months of the year --- not a big issue --- and old plants take more engineering -- newer tech is much more reliable - but in any case we dont need it in this country -- which could easily be 100% renewable if the Greens of all people stopped blocking every Hydro and wind project for 20 years !
Fortunr Oh but this time its different - it comes with kindness and our own special blend of communism with a splash of tribalism
There is very little evidence that having Kiwibank in the market place has made any difference at all to the behaviour of other players - although it has made a few patriotic kiwi's feel better about themselves
My view is that Govt would get a bigger bang for our bucks by making it a legal requirement for kiwibank to be majority NZ owned then floating a share on NZ sharemarket. Growth would be easier to fund and governance discipline would be useful. Currently its destined to be a rump player
Thoughtless, partisan, student-level nonsense. Surely any market-based economy revels in choice. Better this than a cartel of Aussie banks, no?
As for three waters - NZ's water systems are crumbling. The rivers are dying. Cities are going short (despite all the rain) and people have died because we can't supply water. Do you really think councils are about to fix it when they've not bothered for the last 40 years
100% agree, I used to think accusations of communism to Labour were kind of just digs that didn't have necessarily that much substance, and partly given under Helen Clark, Labour were still at least centre left party.
But you are right, this Labour Greens government are actually going down the path of communism, and people in NZ are too blinkered to even realize what is happening.
This is the most left a NZ government has been probably ever, and they are getting lefter by the day, should they win the next election, I'd hate to think what will happen.
Whats really going to change Kiwibank as already ramped up fees very hard to deal with
They are just like the overseas banks
I dont percieve any major changes or mortgage competetion / Deposit rates due to current Reserve Bank Policy
I believe that the Government will not manage this bank properly
They are just like the overseas banks, but only because the overseas banks have changed to match KiwiBank. Don't you remember what eftpos and monthly account fees were like before KiwiBank opened?
It's like 2degrees, sure there is no difference in pricing currently between vodafone 2degrees and spark. But that's not because 2degrees is 'just as bad' as the big boys, rather it's because the big boys have changed to be 'just as good' as 2degrees.
Oh, it does.
National under John Key and Bill English stopped contributions to the superannuation fund, which has now cost the country $20.1B in lost investment returns and counting.
That is after they were forced to promise ahead of the 2008 election that they would not sell Kiwibank, after secret recordings of Bill English emerged saying they were going to sell it once they were in government.
Both topics directly relevant to the article I have commented on, and my comment saying not to vote for parties whose leader is Christopher Luxon is directly relevant to the actions of that party's past leaders.
All of my comments have a point, it just may not be obvious on first reading.
yes -- they chose not to keep borrowing to fund the contributions -- and over 15 years its led to a potential shortfall in returns - which you would have to take away the $$ invested and the $$ in interest we would have had to pay --- however the $8.5 billion that Grant Robertson has lost in his stock market gamble sorry LSAP --- so far feels a lot worse -- on top of all the other borrowings for the last year hate to think what that will look like - not to mention all the interest payments in 15 years time for a fair comparison --
I find it hard to justify the existence of the NZ Superfund. Essentially the government borrows money to invest in the stock market and other very illiquid, direct investments. Just because the fund (which is an empire beholden to itself, built by none other than Mr Orr) made money in the past, doesn't make it a logical use of taxpayers money otherwise every government would be doing it too. There is a more persuasive argument for such a fund in Norway since they funded it from North Sea oil revenues.
I have a colleague with multiple properties and a fleet of fancy cars. All he does is moan about how terrible NZ is and it’s all the fault of the “bloody Māoris” and benefit scroungers. I doubt that getting even richer would make him any less miserable. The current government is by no means perfect but they are doing a reasonable job. We should stop fearing those that have less than us, they are not the ones we need to worry about.
The anecdote happens to be true.
I would actually like to see a change of government at the next election as we need some fresh ideas and more action - but I see no alternative. As a centrist I find both ACT and Greens too far on either extreme. National under Luxon are benefit blamers (bottom feeder haters) and have no new ideas. National led by Nicola Willis or Erica Stanford could be better.
At the moment Labour are the best of a bad lot.
Tends to be a 'labour party' thing the world over. They are great at coming up with ideas for everyone to have a great well paid life regardless if people want to work or contribute or sit home and smoke weed or be a gang member ..... 'be kind'
But unfortunately they tend not to have any real world experience of implementing anything or how to add up and manage finances. So they jist give lots of money to all the people who ask.. to make them all happy.
...then one day they realise they spent all the money there was and they arent allowed to print any more and noone has more tax to give them.. and they arent really sure where it all went as nothing really changed much. And the rich people are still rich and the poor ones still poor.
And there are still the same a bunch of huge issues to solve and the people are angry there isnt more money to hand out
Oops. Maybe its why they bought the bank this time.. best if they run it and give the money out directly instead of needing silly bankers.
Been a long time since I heard about it, but I believe there are certain fish hooks involved in being the government banker that make them less appealing as a business proposition. A government-owned bank being the government banker could solve these issues, although it does raise some concerns around conflict of interest.
"No doubt you will be on the march for freedom to parliament as we speak? If not why not?"
You're deluded mate if you think everyone that can see how bad this government is has to be one of those nutters, just keep on thinking you are right about everything though, like I'm sure you will.
So the notion, which plays on our sense of trans-Tasman rivalry, that big banks profits head out of New Zealand and into the pockets of Australians just isn't right.
According to latest filings on Bloomberg our largest bank ANZ is 61 per cent owned by US shareholders with just 17 per cent of shares held in Australia.
Westpac is 58 per cent US owned with 22 per cent held by Aussie shareholders. CBA and NAB (the parent companies of ASB and BNZ respectively) have similar ownership profiles - all dominated by US shareholders with Australia a distant second.
https://www.nzherald.co.nz/business/who-really-owns-our-banks/ZTAJ6KOSC…
The biggest mistakes made were 1) the Bolger government selling BNZ (to NAB) for a song despite bailing it out 2) the Community Trust banks ASB and Trustbank selling themselves to CBA and Westpac, again too cheaply 3) And those other banks Countrywide, Postbank and National Bank being sold to the big 4 at various times, all with approval from the Commerce Commission. We moved from arguably an overbanked situation (but at least with local head offices) to an oligopoly where all the profits and bulk of good finance jobs go offshore. All this happened from the early-mid 1990's.
Interesting article. While it confirms that New Zealanders (investors in their personal names) own a very small part of the Australian banks, it later clarifies that “while it is accurate to say that US funds are majority shareholders of Australia's banks it has been pointed out that this does not accurately reflect the beneficial ownership. The major US funds hold shares as custodians of Australian and New Zealand savers. On this basis the majority of dividends do flow back to Australian citizens and a much higher proportion flows to kiwis.” I assume this relates in part to shares in large funds held in New Zealander’s Kiwisaver accounts?
All the media reports also seem to suggest that Kiwibank is now going to be 100% owned by the NZ Government. But then I read a little closer (and look up the Companies Office Register) to find that there is over 10% of Kiwibank Limited (the bank) owned by private New Zealand investors. Begs the question of which bank actually does benefit the average mum and dad kiwi the most. I, like many New Zealanders, have always thought supporting Kiwibank is better than using the “Aussie” banks. Now I am not so sure. Would be most interested to see some data.
Betty
It would have been a far cheaper and easier exercise to whack a super-profit tax on the Australian owned banks, rather than having the admin of trying to run a bank.
Side note, the current CEO of Kiwibank has been quite critical of the government, he'll be looking forward to having a whole lot of politicians interfering....
How are they intending to pay for these? more taxpayer debt?
I think if history is any guide, the government is simply terrible at owning business assets and running a profit.. conflicting objectives for a socialist party!!
I'm thinking back to when they initially privatised some banks, the kiwirail and many others.... often times they
1) Over-invest in the assets
2) Sell them to an AU business for less than their worth - who then underinvest in them to make a profit
3) Who then sell it back to our government at 50% more while the assets are worth 40% less due to underinvestment
Maybe the super fund is simply cashing out at a profit to fund underfunded super liabilities - at the cost of increased taxpayer debt....
Stupid labour and their addiction to incurring more national debt to NZer's for low to no added value
The government should stick to its knitting... The most profitable activity the government does is defining tac rates and then collecting tax....
In Labours case - it's reduce taxes and spend more than you make ad infinitum
The govt cannot run a business effectively with competing objectives.. with meddling from politicians to suit their own polictical agendas, low unemployment with high profitability... ?! (create more unnecessary jobs to suit political interests?)
The government will force these companies to make political decisions rather than sound business decisions, which typically leads to extremely poor performance.
Its the start of the decline, and AU companies will be chomping at the bit for the assets to be run down, so they can buy them cheap, fire a lot of people and make it profitable again, then sell it back to us for more 10-20 years later!
i.e. Kiwirail... just saying....
This is just plain DUMB! We should never have spent tragically vast amounts of taxpayers money on setting up Kiwibank in the first place. Notice how Kiwibank has not got rid of FEES, which is why it was set up in the first place. Duh! All the government had to do was spend less than $1mln to pass legislation that would have outlawed fees. But I guess that was just too simple...........
Remind me again of why the State needs to own a bank, but not say, for example, a supermarket chain? Not sure I'm sold on the idea. E.g. banks have vested interests in keeping house prices high (i.e. unaffordable for many). Government should regulate the sector where needed to be sure. But be an active market player...? Hmm. Also using borrowed money from the likes of international investment funds, to make the purchase, while saying it's keeping ownernership in NZ, is kind of a stretch
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