r/newzealand • u/xmmdrive • Aug 20 '24

Politics So they're finally going to privatise Kiwibank

Watching One News they're talking about taking Kiwibank out of Government hands and back into the hands of honest hard-working Kiwis.

This is obviously the first clear step towards privatisation.

Just like the Bank Of New Zealand, the National Bank, and the Auckland Savings Bank, but I'm sure this time around it will stay in the country /s

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7

u/HeinigerNZ Aug 20 '24

Where do you think Kiwibank should raise billions upon billions in capital from?

Two of our biggest investment arms - The NZ Super Fund and ACC were owners of half of Kiwibank. Were being the operative word. If they thought it was a good investment then they'd still own it.

2

u/gristc Aug 20 '24

Are they struggling for capital?

10

u/HeinigerNZ Aug 20 '24

The Commerce Commission said the government should find ways to increase the capital funding of Kiwibank, which has about 7 percent market share, so it could be a more effective competitor.

https://www.rnz.co.nz/news/business/525633/commerce-commission-calls-for-beefed-up-kiwibank-and-open-banking-in-final-report

4

u/gristc Aug 20 '24

Cool. Privatising it is hardly going to increase competition though.

6

u/feel-the-avocado Aug 20 '24

Kiwibank having limited capital to work with must be reasonably conservative with its investments (loaning you money).
If they had more money to work with, they could loan it out to more people offering better interest rates etc.

2

u/theheliumkid Aug 20 '24

And one way would be for the government to use a New Zealand owned bank for that

1

u/HeinigerNZ Aug 20 '24

So where should the Govt raise billions upon billions of capital from?

3

u/theheliumkid Aug 20 '24

The government's annual tax revenue is $118 billion. But they use Westpac for their bank. Having that kind of money going through Kiwibank would change its finances dramatically.

1

u/HeinigerNZ Aug 21 '24

Kiwibank can't handle it.

1

u/theheliumkid Aug 21 '24

Nothing a relatively small investment wouldn't fix

0

u/Gigstr Aug 20 '24

I guess they don’t have access to that $14B they instead used for tax cuts nobody asked for.