Government would retain majority in a KiwiBank privatisation: Key

Monday 24th May 2010

The government would be likely to hold onto a majority stake in KiwiBank if it were partially privatised, Prime Minister John Key said today.

Asked specifically on that point at his post-Cabinet press conference, Key replied:"I'd have thought so."

Key faced intense questioning on the issue this afternoon following comments from Finance Minister Bill English at a post-Budget speech in Christchurch last Friday.

English said the sate-owned bank's rapid growth, combined with new, more stringent capital requirements following the global financial crisis, would require the bank to seek more capital in due course, if it was to continue to grow. He suggested there was strong backing for a "Kiwi ownership" model, which KiwiBank had built on.

Key said there were three clear options for the government if KiwiBank sought more capital to pursue its growth: refusal to put in more government money; contributing additional government capital; and seeking new capital from outside the government.

No formal consideration had yet been given to this or any other privatisations, although this would be required later this year to determine a position for the National Party going into the 2011 election.

"It will be very unambiguous," said Key, who has promised no privatisations only in the first term of a National-led government, which has focused on the dearth of sound savings and investment opportunities for New Zealanders, especially as Budget tax changes make housing a less attractive investment. "I'm not ideologically opposed, but it's not a first term agenda item."

A KiwiBank float would be more likely to be a public float than a trade sale, Key said.

Businesswire.co.nz

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