Bill wants to shift Kiwibank risk to “Kiwi mums and dads”

Written By: - Date published: 6:56 pm, May 29th, 2010 - 12 comments
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When floating the idea of Kiwibank’s possible sale to a post-budget audience last week,  Bill English said that the government did not want to  put more capital in  because it was risky.

Mr English, fresh from delivering the 2010 Budget, told a gathering of South Island business people yesterday that the Government might consider a change of policy “to free up capital and put product on the market for Kiwi mums and dads”.

Kiwibank was a good example of an asset that needed to be dealt with. It had reached the size where it needed either a Government guarantee or an “awful lot of capital”.

“If there’s any asset that’s regarded as risky by credit rating agencies, it’s a small, fast-growing bank,” he said.

Standard and Poor’s have confirmed that Kiwibank’s credit rating will come under pressure if the Government sells part of the bank.

Standard & Poor’s said its current ratings reflected that “the risk of privatisation remains low in the medium term”.

“Nevertheless … privatisation of the bank would be expected to put downward pressure on the ratings.”

Bill English sounds like another dodgy investment adviser wanting to shift risk on to Kiwi mums and dads and cop the profit.

Haven’t they been burnt enough already?

12 comments on “Bill wants to shift Kiwibank risk to “Kiwi mums and dads””

  1. ianmac 1

    Wot? “Bill English said that the government did not want to put more capital in because it was risky.”
    Too risky for the Government so lets get the “Mums and Dads” to take the risks. Thats what it sounds like to me.

  2. Draco T Bastard 2

    Disingenuous misdirections from a rorter – who’d have thunk it?

    Kiwibank happens to be making a profit which would indicate that there is very little risk and selling it probably wouldn’t free up enough capital to make a difference to the government. It certainly wouldn’t pay enough to drop government debt enough to outweigh the benefits of owning the bank.

  3. jason rika 3

    I dare the dick head to float the bank. I will definitely be gone. Sell! sell! sell!

    • TightyRighty 3.1

      awesome, not only can the government improve the balance sheet and provide more blue chips for the investment market, but they can make the country smarter and a better place to live. you’re better off under national

      • lprent 3.1.1

        Provided you don’t have that exhibitionist idiot Paula Bennett wanting to enhance her profile with your private information – right?

        Basically only good if you happen to be someone they want, and who is susceptible to tax bribery

        • TightyRighty

          something Labour never indulged in? tax bribery as opposed to hand out bribery? hand outs that only affected target audiences? discriminating as opposed to true social largesse?

  4. Nick C 4

    Oh dear; the nonsense on this blog about kiwibank privitisation has been spun more than any top ive ever seen.

    First the authors complain about how all the profits will go to all the evil investors. Now you complain that all the risk will go to the nice investors.

    Heres a bombshell; profit and risk go hand in hand. Investors have to take both, which is why share floats arent a handout for the rich.

    • Draco T Bastard 4.1

      Except that there’s no real risk involved is there? All that will happen is that NZ will be worse off than it was owning it.

      • Nick C 4.1.1

        Why is there no risk? There is a risk inherent in every business venture

        If its true that there is a very low risk and the returns are high, then that will be reflected in the price which we sell the shares at. The evil foreign investors will have to pay a large amount of money in order to buy these risk free high return shares.

        • Draco T Bastard

          Why is there no risk?

          Government guaranteed. Especially considering that if a single bank goes down that could reverberate around the globe. That’s why the banks were bailed out in the latest GFC and why the BNZ was bailed out a couple of decades ago.

          If its true that there is a very low risk and the returns are high, then that will be reflected in the price which we sell the shares at.

          Show me one major SOE that’s been sold for it’s full value. It’s making a profit so we have no reason to sell and that is the crux of the argument. We are better off keeping it. It’s almost always better to keep your assets rather than selling them off.

  5. tc 5

    Let’s face it NZ’s had a ‘FOR SALE’ out front ever since they got elected….they’ve started with auckland and if they blag another term NZ’s best public assets will be snapped up by foreigners.

    Even if you legislate to sell to kiwi’s only they’ll be offered more to sell by overseas interests down the line and you simply can’t prevent that….hell that’s NACT’s mantra….market forces. Blinglish’s focus on kiwibank shows their contempt for a challenge to big business….can’t be robbing our mates of profit now can we.

  6. ghostwhowalksnz 6

    I heard the retiring CEO say the extra capital required for the expansion ( high risk) would come from the existing revenue stream. No money up front just lower dividends for a few years ( which would be returned many fold)

    The Aussie banks must be rattling their tea cups over this, and these are the voices English-Key is listening to

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