Barry Soper: ZB senior political correspondent on the Government bolstering Kiwibank in a bid to increase banking competition

The Government's helping boost competition in banking by bolstering Kiwibank. 

The Commerce Commission recently painted the banking landscape as an oligopoly in a review - pointing to the domination by the big four Australian players. 

Today, Prime Minister Chris Luxon's announced he wants to implement all its 14 recommendations and disrupt the status quo. 

Newstalk ZB senior political correspondent Barry Soper says this boost won't make Kiwibank an equal to the big four in Australia - but a cash boost is good for consumers.

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Episode Transcript

Speaker 1 (00:00):
Barry Soper right now, Senior political correspondent. Very good afternoon,
good afternoon, right, lovely to see you, Nice to see you.
Kiwibank's getting some cash.

Speaker 2 (00:08):
Yeah, well, look, this has been talked about for so long,
hasn't it, And it was it was inevitable that was
going to happen. And this has really come out of
the banking inquiry by the ComCom and the government says
it'll be accepting all its recommendations. I think they made
fourteen and that's for open banking and the like that

(00:29):
the big trading banks will be expected to abide by.
But it's pushing ahead with moves to increase banking competition,
they say. But interestingly, Ryan, they're not going internationally for this,
They're going locally. So Kiwibank's parent company, Kiwi Group Capital
and Treasury, they'll be going out with the begging bowl

(00:52):
to Kiwi Savior Funds. They'll be looking at investment institutions,
professional investor groups, potential investments of up to five hundred
million dollars and they say, you know, this is going
to really make a Kiwi bank a much better competitor

(01:13):
for the big Australian for Nichol Willison's reckons that the
big four Australian owned banks will get a hurry up
to respond more generously to customers.

Speaker 3 (01:23):
Zelland is often seen as the little brother against the Aussies.
We want to give that little brother a little bit
more muscle to get a fairer deal for Kiwis advice
to the government is that an additional five hundred million
dollars of capital could support up to four billion dollars
of business lending or ten billion dollars of home lending.

(01:44):
That is sufficient to add competitive pressure to the market
and potentially benefit customers of other banks as well as Kiwibank.
Today we are putting the major banks on notice. We
expect them to act on the Commerce Commission's rec mandations,
including through improvements to the bank switching service and open

(02:05):
banking reform. Our message to the banks is this the
time to act is now. If you drag your heels,
the government is leaving open the possibility of further.

Speaker 2 (02:16):
Action, So watch out. Nicholas on the wall part.

Speaker 1 (02:20):
Do you think they're going to be listening to that?
I mean, in my mind, is this going to turn
Kiwi Bank from a little chihuahua, you know, yapping at
your heels into a pitbull.

Speaker 2 (02:29):
While it's not going to turn it into something like
the Big four Australian banks, there's no doubt about that.

Speaker 1 (02:34):
That's all talk and bluster.

Speaker 2 (02:36):
No it's not. I think you know, a capitalization of
the Kiwi Bank has been talked about for so long.
Don't forget old Jim Anders and I still remember him
opening his account opening Kiwi Bank and Michael Cullen, who
was the Finance Minister at the time, had to be
kicking and sc drag kicking and screaming to approve the

(02:58):
bank as finance minister. So look, this bank has really wallowed,
you'd have to say, compared to the Big four. So
hopefully with capitalization we'll see it more into business and
more into home lending, more competitively.

Speaker 1 (03:12):
Good, if nothing else, good for consumers. Like that totally,
let's talk about this pole. So this is the latest
and last for the year tax payer Union, Caurier Pole
and Shift.

Speaker 2 (03:24):
Well, you know it's fascinating again too, Ryan when you
look at National and Labor both down four and a
half percent, that's big. Well National's on thirty four points
thirty four percent. The Green. The Labor Party is on
just on twenty seven percent. But you know, for a
government after the first year, this is really low. I

(03:48):
can't recall a government after one year being so low.
And interestingly, the party that's made all the running, if
you like, and clearly it's doing it to damage National,
although they would never admit that. His Act, well, look
at Act, it's up four and a half percent.

Speaker 1 (04:08):
Strategy, strategy is working.

Speaker 2 (04:10):
Well, it is working and David Seymour knows this. And
when he brought in the Treaty Principal's Bill, he knew
that it would lead to significant debate. It painted National
into a corner. And there's a poll coming out tomorrow
that will show that New Zealanders in fact are pretty

(04:31):
much behind the debate and maybe a change in the
way we view the treaty.

Speaker 1 (04:37):
So the question was luxe and wrong to strengthen his
narrative because he's driven four and a half percent of
his voters to act.

Speaker 2 (04:45):
That's right, and it's going to be very hard for
him now to extract himself from that corner. And interesting
can well, if you look at the exactly it tris
a bit difficult, But if you look at the Act Party.
You know, they really are now in a prime position,
going well, I've got two years to go, so we've

(05:06):
got a long way to go. But David Seymour is
very good at this day. If there was an election
held tomorrow, they would have the same number of seats
that Winston Peters had at the first MMP election in
nineteen ninety six, seventeen seats. And look, they'll be very
happy with the way they're going at the moment. But
even the old Greens, for goodness sake, what have they

(05:28):
done about a hell of a year? And yeah, down
one eight point three they well said they've got that
really strong base, haven't they. Winston still above six? But
the Mouldy Party, for goodness sake, they're up one seat.
They'll get one more seat in Parliament, so at least
Labor will have a good coalition partner if they can

(05:50):
scrape together the Greens.

Speaker 1 (05:51):
It's interesting, but I mean, I guess the thing is
and we'd probably have to move on. But how sustainable
are those numbers for those minor parties? You know, once
this debate moves on.

Speaker 2 (06:01):
All over the place.

Speaker 1 (06:02):
Basically, all right, let's finish with the boot camps opposition
to them growing? Is it fear?

Speaker 2 (06:07):
I know we haven't got much time, but look, I
saw a breathless Benedict Collins on TV one News last night,
you know, basically asking Karen Sure what he had asked earlier,
if these young offenders harmed New Zealanders, would she resign?

(06:27):
I mean, for goodness sake, if you look at all
the people that deal with young people in situations like this,
two kids running away who are little toe rags anyway
to be there in the first place. They've obviously not
taken the chance to turn their life around. Bad luck
for them, but for the others that are staying, good

(06:47):
luck for them, and those that care about young people
say let them continue, and so do.

Speaker 1 (06:52):
I yeah, yeah, good on you, Barry, Thank you very much.
Good to see you. Barry Soper, Senior political correspondent. For
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