Flogging off our Bank?

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Hon Simeon Brown

Simeon.Brown@parliament.govt.nz

Parliament

13 May 2026

Kia Ora Mr Brown,

It is currently being reported in the media that you are considering partial-privatisation of our one and only state-(peoples)-owned bank, Kiwibank.

See: https://www.rnz.co.nz/news/business/595059/partial-sell-off-of-kiwibank-back-on-the-government-s-agenda

See: https://www.nzherald.co.nz/business/companies/banking-finance/part-privatising-kiwibank-is-back-on-the-governments-agenda-as-it-considers-how-the-bank-can-grow-long-term-without-its-help/premium/463FY57Y4VFF7EYY37DSA233ZU/

To put it politely, this is an ill-conceived idea.

One. It suggests that after unaffordable tax cuts ($14 billion); tax breaks for landlords ($2.9 billion); contract termination fees to Hyundai Shipping ($671 million); scrapping tobacco levies ($250-$300 million); and an unlimited 20% depreciation for equipment for fossil-fuel companies, et al - that your colleague, Finance Minister Nicola Willis - has essentially emptied the piggy bank. She's blown it all.

No wonder you couldn't afford the 33 pay equity claims for 180,000 New zealanders that you and your Party had initially supported. What a shoddy way to balance your Budget.

Selling or partially-privatising Kiwibank will not help you one iota to balance your books. Minister Willis will simply find new ways to fritter it away.

Two. At present, people have a choice. They can bank with an Australian bank or a wholly New Zealand, state-owned bank. By partial privatisation, you are removing that choice. I thought National was keenly in favour of choice?

Three. Please don't try to run the "Mums & Dads" investors line by us. Former PM John Key did that:

“...mums and dads...absolutely at the front of the queue. They’re my number one priority, and we will make sure that we will be setting that at a level where it’s affordable for a lot of New Zealanders.”

See: https://www.interest.co.nz/news/58248/new-zealand-mum-and-dad-investors-number-one-priority-pm-key-when-it-comes-soe-share

-- and it was all total rubbish.

The main investors turned out to be institutional - multi-billion dollar investment corporations - with "Mum & Dads" making up a small fraction, if any.

Whatever benefits Mum & Dads got from their shares in Mighty River (now Mercury) Power; Genesis, or Meridian, has now been swallowed up - plus some - by steadily rising electricity costs. This was predicted by commentators even back then:

"Many voters will struggle to see how opening energy companies to shareholder pressure for greater profits will result in reduced power prices." - Gordon Campbell, 3 February 2011

So it has come to pass, and power prices continue their inexorable rise each year. Max Bradford's oft-quoted mantra of "cheaper prices through competition" has been proven to be a shallow promise at best; a cynical lie at worst. Take your pick.

See: https://www.stuff.co.nz/dominion-post/news/local-papers/the-wellingtonian/4609269/The-mums-and-dads-investing-fallacy

Four. I guarantee you that this will be an unpopular move if you proceed with this as an election policy.

John Key announced his policy to partially privatise Air New Zealand; Mighty River Power, Meridian, and Genesis in January 2011. That year National won 47.31% of the Party vote at the General Election.

See: https://en.wikipedia.org/wiki/2011_New_Zealand_general_election

Partial privation proceeded despite over-whelming public opposition. A referendum on the issue resulted in 67.2% voting AGAINST asset sales.

See: https://www.rnz.co.nz/news/political/230858/asset-sales-will-go-ahead,-says-key

The following General Election in 2014 resulted in a fall in National's Party Vote to 47.04% - a 0.28 percentage-point fall.

See: https://en.wikipedia.org/wiki/2014_New_Zealand_general_election

That may not sound like much but remember that;

(a) Your Party is not currently polling anywhere as high as it it during the Key Administration, and,

(b) Your current Leader is nowhere as popular as John Key was at the time. Yes, I know, quelle horreur!!

You simply don't enjoy anywhere near the political capital that National did during Key's term.

Five. Should you proceed with this as an election policy; should National lead the next government (not likely given recent polling); and should you go ahead with partial privatisation, I promise that I will close my Kiwibank account prior to the sale. I promise to support a campaign for other Kiwibank customers to close their accounts as well.

Whatever remains will be a hollowed out shell of this institution and not worth much. Who would want to invest in an enterprise bleeding customers? Certainly not the mythical "Mum & Dad" investors - they're too busy juggling power, fuel, food, and rising mortgage rates costs.

Six. You wrote to Kiwibank's parent company, Kiwi Group Capital (KGC) stating;

"We expect KGC to undertake work on alternative growth scenarios, along with the capital required for these."

Perhaps one "alternative growth scenario" is to switch all government banking from ANZ Bank New Zealand Limited, ASB Bank Limited, Citibank N.A., and Westpac New Zealand Limited - to Kiwibank. It escapes me why government is paying four OVERSEAS-OWNED banks for financial services when we have a perfectly good state-owned bank right here in Aotearoa New Zealand.

See: https://www.procurement.govt.nz/contracts/banking-services/banking-services-providers/

Switching to Kiwibank as provider for all government services has considerable benefits:

(a) all profits stay in the country,

(b) keeping profits in the country helps our balance-of-payments, by not remitting said profits to Australia,

(c) this helps build Kiwibank,

(d) it sends a positive message reinforcing government confidence in Kiwibank, and

(e) it would be a popular move with voters. (I am giving you free electioneering advice. You're welcome.)

You should understand that this will be an election issue and your Coalition colleague, the Rt. Hon. Winston Peters will make a meal of it. It's a ready-made populist issue that you are handing to him on a very shiny silver platter. Why you would do that escapes me, unless Finance Minister Willis is that desperate to balance her Budget?

If this is meant as electoral self-destruction; part of a cunning plan to lose the election in November and end up on the Opposition benches, please excuse me.

I won't stand in your way; I certainly wouldn't want to be around either when the smelly-stuff hits the fan as we run perilously short of fuel. That way, Labour can deal with the crisis, as they did successfully with Covid19 in 2020-23, and you can blame them in 2029 for whatever.

Regards

Frank Macskasy

Voter and Kiwibank customer

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