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?