Nicola Willis appears intent on making Kiwibank a bigger player in the banking sector
The Finance Minister told the National Party's annual conference yesterday she wants to look into privatising the New Zealand-owned bank.
It comes only a couple of years after the previous Government secured complete state ownership for 2.1 billion dollars.
Willis told Heather du Plessis-Allan she's not proposing selling off the Government's share - she just wants to add to it with new capital.
She says the motivation isn't about getting more cash out of Kiwibank - it's about growing it by having other people putting cash in.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
We're a business meet insight for the business hour. We're
the head the dup to Cla and my hr on
New storksb evening.
Speaker 2 (00:13):
Coming up with the next hour, We're going to have
a chat to Sean Soley on the supermarket, the share
market rather volatility that we're seeing at the moment. I've
got a little update for you on that. Hugh White
from Australia in studio with me on whether Orcust will
actually provoke war. We're going to check in with our
UK correspondent on whether to expect more riots overnight. It's
coming up eight past six and with us right now,
we've got Nikola Willis, the Finance Minister evening.
Speaker 1 (00:33):
Nikola, good evening, Heather.
Speaker 2 (00:35):
So what's your preferred option for how are you going
to recapitalize Kiwibank?
Speaker 1 (00:40):
Well, look, there are several options that we want to consider.
When I look at Kiwi Bank, I see an opportunity
to grow it so that it can take on the
Australian Bank, the Commerce Commission, who has been looking at
banking competition in New Zealand. Seed yup, there's a pretty
cozy ologotoly at the top there with a big four
banks and Kiwibank is best place to be the maverick,
(01:04):
the disruptor who could take on those big four banks.
But that would require it to have more investment in
it in the future so it could grow. I don't
need to tell you that as a government we don't
have huge amounts of spare cash sitting around. But you
know what, there are key we saver funds, there are EWE,
there's the super Fund, there's acc who are always looking
(01:26):
for good New Zealand based investments, and I say let's
have a look there for you.
Speaker 2 (01:30):
Would you consider opening it up to mum and dad
investors on the share market.
Speaker 1 (01:35):
I think that's something that we should consider and I'd
like to take advice on that option.
Speaker 2 (01:41):
Okay, if you were to sell it to the likes
of or sell part of it to the likes of
super Fund and so on, would you tie their hands
so that they were unable to onsell it to foreign investors.
Speaker 1 (01:52):
Well, just to be clear, in the first instance, I'm
not proposing actually to sell the government to share it
or what I'm saying is let's stick with the money
the government already hasn't it, and add to that with
new capital, which is a slightly different thing, because this
isn't I'm not motivated here about trying to get cash
out of keep we back. That's not what I want
to do. I want to grow it, so I want
(02:12):
other people to be able to put cash in it.
But the question you ask is a good one, which
is on what terms would a new investor want to
make that investment. And that's obviously something I need to
take more advice on and consider. And what I said
at the weekend was let's do that. Let's put that
on the table. Let's talk about what would be needed
to grow that little bank that could into something big
(02:35):
enough to take on the big Old.
Speaker 2 (02:36):
I mean, is that going to be terms acceptable to
the likes of the super fund, because isn't that actually
why they pulled out in the first place, and Grant
Robinson had to chuck two point one billion in to
cover them because they didn't want to be to have
their hands tied like that.
Speaker 1 (02:50):
Look, I understand that those were some of the issues,
So I'm interested to look at what are the basis
on which people would want to invest, And maybe that
would be that private market would consider investing if they
knew that there was going to be an initial public
offering to New Zealanders mums and dads down the line.
Let's have a look at what that scenario could be,
(03:11):
for example. But the basic goal here is let's accelerate
the growth of Kiwi Rail. Make it so it's not
Kee we Rail, we bank.
Speaker 2 (03:18):
Although while you're at it, make it.
Speaker 1 (03:20):
More disruptive and make it more disruptive to the Australian banks.
And for one really good reason, I want affordable, fair
banking services for New Zealanders and the evidence from the
Commerce Commission is they're not getting as good a deal
as they should right now.
Speaker 2 (03:35):
Yeah, is when he going to be okay with this?
Because he's not been a big fan of getting private
money involved in public assets, is he?
Speaker 1 (03:42):
Well, I'd be careful to say that Cabinet hasn't taken
any decisions on this. But what I flagged at the
weekend was I think this is something we should be
thinking about. I'm gathering advice on it and I haven't
taken any recommendations to cabinet yet, so I wouldn't get
ahead and stage wash and Peter's, or indeed any of
my other cabinet colleagues think about it. Yet I think
(04:04):
The first thing is to have the options on the
table and consider the costs and benefits of each.
Speaker 2 (04:10):
Have a problem, Nicola, I don't reckon you'll have a problem,
because I heard he really likes you, so he probably
listens to you.
Speaker 1 (04:17):
Well, I really like him. I really like him too,
because he contributes wisdom and he contributes reflected.
Speaker 2 (04:24):
This is the right approach to take with him. And
then he'll just bend over. He'll say yes if you
flatter him.
Speaker 1 (04:29):
Well. I think the wonderful thing about a truly respectful
relationships you well understand is you don't necessarily always agree
with each other, and that is going to be the
case with me and Winston Peters from time to time.
But this, I think is a proposal that could have legs.
I want to explore it, see if it does, and
(04:50):
then if it does, then that's an idea that I
would bring to cabinet.
Speaker 2 (04:53):
Good stuff now, listen. Seawan Sweeney of the CRL and
Auckland has given an exit interview saying that political spatsdriving
up the cost of infrastructure and that the way to
bring down the cost is to stop political fights. Is
that even possible? Could we do that?
Speaker 1 (05:07):
I think we could do more of that. You know,
obviously there are going to be some projects which we
have to agree to disagree on. And I think our government,
for example, made the right decision saying we're not going
a hue with light railroad, so.
Speaker 2 (05:20):
You would though, right. But now the labor guys say
that's the wrong decision. So how do you square that circle?
Speaker 1 (05:25):
Yeah? I think the way we square it is let's
look out over thirty years and think about all of
the infrastructure we need to build across our transport system,
our health system, education system. If we could agree on
ninety percent of that across the big parties, that would
provide massive certainty to the construction firms, investors and the like.
(05:48):
And this is what Chris Biship, our Minister for Infrastructure,
is going for. He is working to get together a
thirty year infrastructure pipeline plan to provide some clarity over
that and to her cre the Opposition triinan spokesperson has
indicated that the labor place is more interested in bipartisanship
in that infrastructure planning space. So let's see what we
(06:10):
can do.
Speaker 2 (06:10):
Yeah, but okay, that's fine. I mean Barbara over at
Labour seems like a reasonable bird. But what are you
going to do about Julianne and the Greens? I mean
she doesn't even like a road right, how are you
going to do that?
Speaker 1 (06:20):
Look, even though I'm not smart enough to solve the problem. Agree,
I mean you tell me you're going to ask me
to solve that one today. I mean that that's bigger issues.
That's bigger issues, the two big main parties to come
to a contentus one. That'd be pretty powerful.
Speaker 2 (06:38):
Yeah, fair enough. Hey, listen, do you agree with John
Key that the Treaty Principles Bill is bad policy?
Speaker 1 (06:44):
Well, obviously we didn't campaign on it and we didn't
support it. That's well known. Or you have a coalition
agreement in which we said, yep, we'll put that to
a Select Committee hearing. And that's the agreement. We've done
with that, and so we're going to stick to that agree.
Speaker 2 (07:00):
See more reckons that he might be able to change
your mind though if it proves to be actually a
great idea and very popular. Can he?
Speaker 1 (07:06):
Oh? Will leave even the optimist, isn't he?
Speaker 2 (07:09):
Nicola? Thank you very much appreciated. Nichola Willis Finance Minister.
Speaker 1 (07:13):
For more from hither Duplessy Allen Drive.
Speaker 2 (07:15):
Listen live to news talks it'd be from four pm weekdays,
or follow the podcast on iHeartRadio
We're a business meet insight for the business hour. We're
the head the dup to Cla and my hr on
New storksb evening.
Speaker 2 (00:13):
Coming up with the next hour, We're going to have
a chat to Sean Soley on the supermarket, the share
market rather volatility that we're seeing at the moment. I've
got a little update for you on that. Hugh White
from Australia in studio with me on whether Orcust will
actually provoke war. We're going to check in with our
UK correspondent on whether to expect more riots overnight. It's
coming up eight past six and with us right now,
we've got Nikola Willis, the Finance Minister evening.
Speaker 1 (00:33):
Nikola, good evening, Heather.
Speaker 2 (00:35):
So what's your preferred option for how are you going
to recapitalize Kiwibank?
Speaker 1 (00:40):
Well, look, there are several options that we want to consider.
When I look at Kiwi Bank, I see an opportunity
to grow it so that it can take on the
Australian Bank, the Commerce Commission, who has been looking at
banking competition in New Zealand. Seed yup, there's a pretty
cozy ologotoly at the top there with a big four
banks and Kiwibank is best place to be the maverick,
(01:04):
the disruptor who could take on those big four banks.
But that would require it to have more investment in
it in the future so it could grow. I don't
need to tell you that as a government we don't
have huge amounts of spare cash sitting around. But you
know what, there are key we saver funds, there are EWE,
there's the super Fund, there's acc who are always looking
(01:26):
for good New Zealand based investments, and I say let's
have a look there for you.
Speaker 2 (01:30):
Would you consider opening it up to mum and dad
investors on the share market.
Speaker 1 (01:35):
I think that's something that we should consider and I'd
like to take advice on that option.
Speaker 2 (01:41):
Okay, if you were to sell it to the likes
of or sell part of it to the likes of
super Fund and so on, would you tie their hands
so that they were unable to onsell it to foreign investors.
Speaker 1 (01:52):
Well, just to be clear, in the first instance, I'm
not proposing actually to sell the government to share it
or what I'm saying is let's stick with the money
the government already hasn't it, and add to that with
new capital, which is a slightly different thing, because this
isn't I'm not motivated here about trying to get cash
out of keep we back. That's not what I want
to do. I want to grow it, so I want
(02:12):
other people to be able to put cash in it.
But the question you ask is a good one, which
is on what terms would a new investor want to
make that investment. And that's obviously something I need to
take more advice on and consider. And what I said
at the weekend was let's do that. Let's put that
on the table. Let's talk about what would be needed
to grow that little bank that could into something big
(02:35):
enough to take on the big Old.
Speaker 2 (02:36):
I mean, is that going to be terms acceptable to
the likes of the super fund, because isn't that actually
why they pulled out in the first place, and Grant
Robinson had to chuck two point one billion in to
cover them because they didn't want to be to have
their hands tied like that.
Speaker 1 (02:50):
Look, I understand that those were some of the issues,
So I'm interested to look at what are the basis
on which people would want to invest, And maybe that
would be that private market would consider investing if they
knew that there was going to be an initial public
offering to New Zealanders mums and dads down the line.
Let's have a look at what that scenario could be,
(03:11):
for example. But the basic goal here is let's accelerate
the growth of Kiwi Rail. Make it so it's not
Kee we Rail, we bank.
Speaker 2 (03:18):
Although while you're at it, make it.
Speaker 1 (03:20):
More disruptive and make it more disruptive to the Australian banks.
And for one really good reason, I want affordable, fair
banking services for New Zealanders and the evidence from the
Commerce Commission is they're not getting as good a deal
as they should right now.
Speaker 2 (03:35):
Yeah, is when he going to be okay with this?
Because he's not been a big fan of getting private
money involved in public assets, is he?
Speaker 1 (03:42):
Well, I'd be careful to say that Cabinet hasn't taken
any decisions on this. But what I flagged at the
weekend was I think this is something we should be
thinking about. I'm gathering advice on it and I haven't
taken any recommendations to cabinet yet, so I wouldn't get
ahead and stage wash and Peter's, or indeed any of
my other cabinet colleagues think about it. Yet I think
(04:04):
The first thing is to have the options on the
table and consider the costs and benefits of each.
Speaker 2 (04:10):
Have a problem, Nicola, I don't reckon you'll have a problem,
because I heard he really likes you, so he probably
listens to you.
Speaker 1 (04:17):
Well, I really like him. I really like him too,
because he contributes wisdom and he contributes reflected.
Speaker 2 (04:24):
This is the right approach to take with him. And
then he'll just bend over. He'll say yes if you
flatter him.
Speaker 1 (04:29):
Well. I think the wonderful thing about a truly respectful
relationships you well understand is you don't necessarily always agree
with each other, and that is going to be the
case with me and Winston Peters from time to time.
But this, I think is a proposal that could have legs.
I want to explore it, see if it does, and
(04:50):
then if it does, then that's an idea that I
would bring to cabinet.
Speaker 2 (04:53):
Good stuff now, listen. Seawan Sweeney of the CRL and
Auckland has given an exit interview saying that political spatsdriving
up the cost of infrastructure and that the way to
bring down the cost is to stop political fights. Is
that even possible? Could we do that?
Speaker 1 (05:07):
I think we could do more of that. You know,
obviously there are going to be some projects which we
have to agree to disagree on. And I think our government,
for example, made the right decision saying we're not going
a hue with light railroad, so.
Speaker 2 (05:20):
You would though, right. But now the labor guys say
that's the wrong decision. So how do you square that circle?
Speaker 1 (05:25):
Yeah? I think the way we square it is let's
look out over thirty years and think about all of
the infrastructure we need to build across our transport system,
our health system, education system. If we could agree on
ninety percent of that across the big parties, that would
provide massive certainty to the construction firms, investors and the like.
(05:48):
And this is what Chris Biship, our Minister for Infrastructure,
is going for. He is working to get together a
thirty year infrastructure pipeline plan to provide some clarity over
that and to her cre the Opposition triinan spokesperson has
indicated that the labor place is more interested in bipartisanship
in that infrastructure planning space. So let's see what we
(06:10):
can do.
Speaker 2 (06:10):
Yeah, but okay, that's fine. I mean Barbara over at
Labour seems like a reasonable bird. But what are you
going to do about Julianne and the Greens? I mean
she doesn't even like a road right, how are you
going to do that?
Speaker 1 (06:20):
Look, even though I'm not smart enough to solve the problem. Agree,
I mean you tell me you're going to ask me
to solve that one today. I mean that that's bigger issues.
That's bigger issues, the two big main parties to come
to a contentus one. That'd be pretty powerful.
Speaker 2 (06:38):
Yeah, fair enough. Hey, listen, do you agree with John
Key that the Treaty Principles Bill is bad policy?
Speaker 1 (06:44):
Well, obviously we didn't campaign on it and we didn't
support it. That's well known. Or you have a coalition
agreement in which we said, yep, we'll put that to
a Select Committee hearing. And that's the agreement. We've done
with that, and so we're going to stick to that agree.
Speaker 2 (07:00):
See more reckons that he might be able to change
your mind though if it proves to be actually a
great idea and very popular. Can he?
Speaker 1 (07:06):
Oh? Will leave even the optimist, isn't he?
Speaker 2 (07:09):
Nicola? Thank you very much appreciated. Nichola Willis Finance Minister.
Speaker 1 (07:13):
For more from hither Duplessy Allen Drive.
Speaker 2 (07:15):
Listen live to news talks it'd be from four pm weekdays,
or follow the podcast on iHeartRadio
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