Jenee Tibshraeny: NZ Herald Wellington business editor on the Government's plan to inject more capital into Kiwibank

The Government has dropped further hints it isn’t opposed to diluting its 100% ownership of Kiwibank to enable it to grow.

While Kiwibank is expanding, it needs a lot more capital to be the disrupter it was set up to be to challenge the big four Australian-owned banks.

NZ Herald Wellington business editor Jenee Tibshraeny speculates about the Government's next steps.

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Episode Transcript

Speaker 1 (00:00):
Now the government's dropping more hints that it's looking to
find ways to inject more capital into Kiwibank, obviously to
improve competition in the banking sector. The Minister of State
Owned Enterprises, Paul Goldsmith, says the government is looking into it.
Janetibshrney is The Herald's Wellington business editor with us.

Speaker 2 (00:13):
Now, how do you name, hey, Heather.

Speaker 1 (00:16):
So it's got a couple of options here, right. It
can obviously inject the cash itself, this is the government.
Or it can sell down part of its share in Keiwibank.
Which is the most likely? Do you think?

Speaker 2 (00:26):
Yeah, that's right. Look, I can't say which one is
the most likely at the moment, but I think basically, well,
actually no, maybe I can, maybe I can speculate. As
we all know, the government is cutting costs, we have
a lot of debt, so the chances of it forking
out billions of dollars to put into a kiwibank right

(00:46):
now probably is unlikely, particularly at a time we've got
people in the public sector losing their jobs, people crying
out for more funding for nurses, police, so on and
so on. Also, this government, I believe isn't as wedded
to the concept of Qwibank being entirely government owned. Now.
I've talked to Paul Goldsmith also Nichola Willis, the Finance Minister,

(01:09):
and they are open minded as to how to get
more capital into qvbank to enable it to grow. Now
before people think the government's going to rush out and
sell it to some foreign investors or something, I'm not
sure if that would happen. You know, there are a
lot of options, including, for example, selling part of it
back to the Superfund, for example, which previously owned a

(01:32):
stake in Kwibank. So I think that there are a
bunch of options and something like that I think could
be quite quite workable.

Speaker 1 (01:38):
If Superfund were to buy into it. Does the government
have any control over who's super Fund then on sells
it to if they want well that yeah.

Speaker 2 (01:47):
Look that is the key point, and that is an
issue that the previous labor government had because when Kwibank
was owned by the New Zealand Post acc and the Superfund,
the city and New Zealand Post wanted out and the
super Fund said that's okay, we'll buy your stakes on
the on the condition that if we want to sell

(02:09):
out at some point or we want to welcome capital
from private investors, then we should be able to do that. Now,
Grant Robertson didn't like that idea, and that's why the
government ended up buying Kiwibank outright for two point one
billion dollars. You know, I think this government is showing
increasing signs that it would be open to different options. Now,

(02:32):
Nikola Willis and Paul Goldsmith outright told me that Paul
Goldsmith also wrote has written to the KWI Bank board saying,
come to me with options for how you think we
can grow a kiwibank. And also, interestingly, the government is
busy working on doing something different. It's working on writing

(02:54):
purpose statements for all the companies and enterprises that it owns. Now,
the Treasury reckons this is a valuable exercise because it
wants the government to put down on paper what exactly
is the point of owning enterprises. Now ki Bank is
at the top of the priority list for this exercise.

(03:16):
The Treasury has said, look, we're doing this. It doesn't
mean to say we're trying to assess what to sell.
But if it comes out that there is no point
owning some of these entities, including Kiwibank, the government could
potentially make a case to sell entertaining part of it.

Speaker 1 (03:36):
Okay, David Seymour's keen on that, Like, he's made it
quite clear that he wants to sell down some of
our assets. But now would the NATS feel about that.

Speaker 2 (03:45):
Look at the moment, they are just saying they are
open minded and that they will assess the options. Now
that sounds like a boring answer, but I think it
is a significant answer because previously governments have said straight
up nice you know, they've said no. For example, Labor
Grant Robertson said no, k you mean because Zion done
and you know, government owned and that's how we're keeping it.

(04:07):
So I think this is a broader sort of piece
of work that will simmer away in the background. Paul
Goldsmith has said, now he's the Minister for State owned Enterprises,
that he wouldn't do anything drastic, any big thing would
be taken to the election and voters would have their say.
But you could assume that this exercise that's happening where

(04:29):
they're doing these purpose statements, if those come back and
say why the heck do we own this enterprise? You
could assume they could go to the next election and
say look, we're campaigning on selling it or selling part
of it.

Speaker 1 (04:41):
Music to my ears. I'm here for that.

Speaker 2 (04:43):
Thank you.

Speaker 1 (04:44):
Jane tip Trainey, The Herald's Wellington Business Enter. For more
from Heather Duplessy Allen Drive, listen live to News Talk
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