web analytics

Kiwibank is being privatised by stealth

Written By: - Date published: 8:37 am, November 2nd, 2016 - 31 comments
Categories: ACC, David Farrar, Economy, Financial markets, national, Privatisation, same old national, the praiseworthy and the pitiful - Tags:


With everything else that is happening this week the partial privatisation by stealth of Kiwibank has escaped scrutiny.

Two days ago the Government announced that the NZ Super Fund and the ACC had taken a share in Kiwibank. The NZSF will own 25% and the ACC will own 22%.

Through financial sleigh of hand the Government will receive a $200 million “dividend” that it can then use for other purposes. Basically money paid to the NZSF for retirement and to ACC for future payment of accident compensation is being invested in Kiwibank. These organisations get the income stream and the Government gets a cheque but loses some of its income stream through NZ Post. And there are now three organisations that are going to review Kiwibank’s performance.  The amount of treble guessing of matters is going to increase considerably.

National’s pollster thinks it is a good idea because the NZSF and ACC have professional fund managers “who will do a far better job monitoring the performance of Kiwibank than a couple of staff at Treasury”. Interesting that he thinks that National’s oversight of government activity is that appalling that it has to be outsourced. Although he may have a point.

This week it was confirmed that the Government had run Solid Energy into the ground with the business being sold to private entities and the expected return for creditors would be 50c in the dollar. On top of this the Government has assumed responsibility for acid mine drainage from the Stockton plateau at a current estimated cost of $36 million. A performance of this kind would lead to people losing their jobs in the private sector. Shame the same rules do not apply to this Government.

The Kiwibank deal is slightly different to that announced in April this year. Back then ACC’s share was 20% and now it has increased by 2%. As well as that the purchase price was reduced and parent company NZ Post had to leave a further $90 million cash in Kiwibank increasing its value.

James Shaw has been criticised because he has said that the transaction is the start of the privatisation of Kiwibank.  The NZSF and ACC cannot sell shares for five years and do need to offer the shares back to the Government first but given they have bought the shares at a discount the buy back could be expensive.  And a Government declining to buy the shares will mean that they will almost inevitably be sold to private interests.

If only the ministers of this Government could do their job properly this financial sleight of hand would not have to occur.

31 comments on “Kiwibank is being privatised by stealth ”

  1. Draco T Bastard 1

    If only the ministers of this Government could do their job properly this financial sleight of hand would not have to occur.

    This government is doing what it sees as its job properly – impoverishing the many to further enrich the already rich.

    We need Labour/Greens to come out and say that they will fully renationalise that which has been privatised.

    • DoublePlusGood 1.1

      Yep, and without compensation to boot.

      • NZJester 1.1.1

        All those who got the privitized companies shares have already received back their investment money and lots of profit on top of it that anyway. The money should have gone into the public purse and not their pocket. A lot of it was also purchased with their extra money from the tax breaks given to them by National.

    • Chooky 1.2

      +100 DTB…where is the Labour Party on this?…and the Green Party?…and NZF?

  2. dukeofurl 2

    Once another entity makes a ‘very good offer’ the investment shareholders would be obliged to accept- its out of the governments hands they would say.

  3. Siobhan 3

    “Interesting that he thinks that National’s oversight of government activity is that appalling that it has to be outsourced.”…isn’t that pretty much their admission on, well, everything.
    Whoever voted for National voted in a Government who can’t manage and are having to outsource the running of of Schools, housing, prisons, health etc etc.

    It’s like they voted in a stockbroker to run the country’s resources.

    Oh yeah, thats right, they did…

  4. Michelle 4

    Agree with your Siobhan you have summed it up nicely whoever voted for National voted for a government that cannot manage anything full stop

  5. johnm 5

    Despairing: But they still keep voting them in don’t they! 🙁
    Oh Yeh! Then there’s the million who can’t even be bothered to vote! No wonder we’re in the sh*t eh?

  6. save nz 6

    The government is just following the private sector into sweating the assets… and moving money and assets around.

    Why pumpkin patch went into receivership…

    “Muir’s annual remuneration had increased to $551,000, Prendergast received $587,000 and a company associated with the latter was paid $22.5m for providing store fixtures and fittings to Pumpkin Patch in the four years following its 2004 NZX listing.
    But one of the biggest issues was the huge increase in debt. The company raised $101.3m through its IPO but $61.3m of this was used to purchase shares from existing shareholders.

    The post-IPO store expansion programme was funded mainly through borrowings, with the company’s short and long term debt increasing from $4.7m in July 2004 to $81.3m four years later.”

    Why Wynyard are in voluntary administration….

    “In December 2011 Wynyard was incorporated as a non-trading subsidiary of Christchurch based Jade Software. In early 2012 “Wynyard Group” was launched as a brand and discrete business unit of Jade. The Wynyard Risk Management and Wynyard Investigations products were relaunched and Wynyard also assumed management of several Jade financial services accounts, which were the foundations of the Wynyard Intelligence product.

    In June 2013 the company issued a prospectus for the sale of shares to the public at an indicative price range between $1.10 and $1.65 a share. The final price was $1.10, which enabled it to raise $66.1m from the public. However, $23.6m of this was used to purchase intangible assets from Jade Software.”


    • tc 6.1

      Greg muir chaired hanover finance at a time it was obvious what hotchin and watson were up to and was dumped as warehouse ceo some years prior….a paid up boys clubber.

      the club members never lose out they always get paid top dosh and its never their fault when it inevitably falls over.

  7. Mike the Lefty 7

    ditto New Zealand Post.
    National is very good at redefining terms such as privatisation, unemployment, fish stocks, poverty and many others.
    I suppose its easy when you have the arch spin meister Steven Joyce in your cabinet.

  8. fisiani 8

    Since when was the Super Fund and ACC private?
    Do you not understand what privatize means?

    I despair for the Left. Must try harder.

    • Bearded Git 8.1

      @fisiani You don’t seem to understand this transcation fisi. ACC and the NZSF would ordinarily be spending the money they are spending to buy 47% of Kiwibank on non-public investments. Not only is the government getting $200m now but it is privatising 47% of Kiwibank-a future government is very unlikely to be able to afford to buy the shares back.

      This is NOT privatisation by stealth; it is privatisation pure and simple.

      I despair for the Right. Must try harder……. but then we have seen this government stuff up the public’s finances on many occasions ; a cool billion on South Canterbury Finance, Solid Energy, hugely discounted energy company sell-offs, ballooning government debt* etc etc

      * before you come back with the old Earthquake excuse on this, it was reported yesterday that insurance companies have paid out $19 billion to date (and more than $20 billion when all settlements are done) on the earthquake. When EQC payments of several billions are added to this, only a relatively small increase in government debt was created by the earthquake.

    • Mike the Lefty 8.2

      I think it is you that must try harder fisiani.
      It is an open secret that National want to privatise ACC.
      They don’t even deny it.

    • Lara 8.3

      You do realise that ACC and the Super Fund can sell the shares in five years time? To anyone they like?

      Did you even read the OP?

  9. pdm 9

    It cannot be privatisation because both the NZ Super Fund and ACC are quasi government entities so in the strictest terms the 47% remains in government hands.

    Having said that and even though Kiwibank is a rapacious fee charger, It has been a noose around the neck of Postbank and will therefore not provide competitive returns to its new investors. There must be better investments nationally and internationally than Kiwibank and the Trustees of both organisations have an obligation to New Zealand taxpayers to pursue these.

    • Cinny 9.1

      Isn’t it ironic that the government won’t even support Kiwibank by using it? They would rather give any bank fee’s/transactions accumulated to Westpac so the Aussie bank profits over the Kiwibank.

      Shouldn’t act surprised I guess, they haven’t been supporting the super fund either for years. Outgoing government should putting their money where their mouths are and support Kiwibank by using it.

      Rather the outgoing government go against the public majority of a referendum and sell another portion of an asset, aren’t we in surplus? Why are we selling everything if the government is so fiscally responsible?

    • DH 9.2

      @pdm the troll.

      Annual reports for Kiwibank can be found here;


      2015/2016 Nett profit before tax $165 million.

      Rolling annual return on equity 12.1%

      “It has been a noose around the neck of Postbank”

      Postbank was sold to ANZ in the ’90s, wtf are you on?

  10. Cinny 10

    Robbing Peter to pay Paul lololz. Government should be gifting it to the super fund, How much does out going government owe super fund now? It’s been many years since they gave the fund some monies.

    If ACC is ever privatised does it mean that a portion of kiwibank will end up in private ownership as a result?

  11. Infused 11

    Good. Shitty bank.

  12. pdm 12

    Cinny 4.07pm

    The Clark/Cullen Government didn’t support it either.

    That probably shows the quality of Kiwibank which should be sold as it is neither use nor ornament and certainly does not do anything like Jim Anderton said it would for its customers. Still most thinking people did not expect it to so it has lived up to our expectations.

    • Siobhan 12.1

      I’m curious as to what you think Australian owned banks are doing for us that makes Kiwibank look so shitty??.

    • Ch_ch chiquita 12.2

      Funny that. I’m actually in the process of moving all our accounts (personal and business) from Westpac to Kiwibank for one simple reason. At Kiwibank we get a local account manager that is making an effort to find ways to help us; doesn’t guarantee an outcome we wish for but at least not talking to a call centre that slams the door shut in your face and not even trying to think creative how to help a small business.
      I’m not interested in fancy offices and smart machines to deposit money at. I want personal service when I need it.

    • Lara 12.3

      You’ve left some ridiculously nonsensical comments here pdm

      I’ve used Kiwibank for all my business banking for years now. I love them. When I call with a query I get a Kiwi, here in NZ, who knows our systems and helps me. I hardly have to wait very long for my call to be answered.

      And their fees are pretty standard. In fact, they’re ridiculously low. And I have a LOT of transactions.

      So I’m calling bullshit on your “does not do anything…. for it’s customers”.

      It’s done more than live up to my expectations.

  13. millsy 13

    The era of privatisation is over. The era of privatisation with New Zealand characteristics has begun.

Recent Comments

Recent Posts

  • Twenty highlights of 2020
    As we welcome in the new year, our focus is on continuing to keep New Zealanders safe and moving forward with our economic recovery. There’s a lot to get on with, but before we say a final goodbye to 2020, here’s a quick look back at some of the milestones ...
    2 weeks ago

  • Cook Islanders to resume travel to New Zealand
    The Prime Minister of New Zealand Jacinda Ardern and the Prime Minister of the Cook Islands Mark Brown have announced passengers from the Cook Islands can resume quarantine-free travel into New Zealand from 21 January, enabling access to essential services such as health. “Following confirmation of the Cook Islands’ COVID ...
    BeehiveBy beehive.govt.nz
    14 hours ago
  • Supporting communities and landowners to grow employment opportunities
    Jobs for Nature funding is being made available to conservation groups and landowners to employ staff and contractors in a move aimed at boosting local biodiversity-focused projects, Conservation Minister Kiritapu Allan has announced. It is estimated some 400-plus jobs will be created with employment opportunities in ecology, restoration, trapping, ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Border exception for some returning international tertiary students
    The Government has approved an exception class for 1000 international tertiary students, degree level and above, who began their study in New Zealand but were caught offshore when border restrictions began. The exception will allow students to return to New Zealand in stages from April 2021. “Our top priority continues ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Tiwai deal gives time for managed transition
    Today’s deal between Meridian and Rio Tinto for the Tiwai smelter to remain open another four years provides time for a managed transition for Southland. “The deal provides welcome certainty to the Southland community by protecting jobs and incomes as the region plans for the future. The Government is committed ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New member for APEC Business Advisory Council
    Prime Minister Jacinda Ardern has appointed Anna Curzon to the APEC Business Advisory Council (ABAC). The leader of each APEC economy appoints three private sector representatives to ABAC. ABAC provides advice to leaders annually on business priorities. “ABAC helps ensure that APEC’s work programme is informed by business community perspectives ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Govt’s careful economic management recognised
    The Government’s prudent fiscal management and strong policy programme in the face of the COVID-19 global pandemic have been acknowledged by the credit rating agency Fitch. Fitch has today affirmed New Zealand’s local currency rating at AA+ with a stable outlook and foreign currency rating at AA with a positive ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Additional actions to keep COVID-19 out of NZ
    The Government is putting in place a suite of additional actions to protect New Zealand from COVID-19, including new emerging variants, COVID-19 Response Minister Chris Hipkins said today. “Given the high rates of infection in many countries and evidence of the global spread of more transmissible variants, it’s clear that ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • 19 projects will clean up and protect waterways
    $36 million of Government funding alongside councils and others for 19 projects Investment will clean up and protect waterways and create local jobs Boots on the ground expected in Q2 of 2021 Funding part of the Jobs for Nature policy package A package of 19 projects will help clean up ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • New Zealand Government acknowledges 175th anniversary of Battle of Ruapekapeka
    The commemoration of the 175th anniversary of the Battle of Ruapekapeka represents an opportunity for all New Zealanders to reflect on the role these conflicts have had in creating our modern nation, says Associate Minister for Arts, Culture and Heritage Kiri Allan. “The Battle at Te Ruapekapeka Pā, which took ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Better care for babies with tongue-tie
    Babies born with tongue-tie will be assessed and treated consistently under new guidelines released by the Ministry of Health, Associate Minister of Health Dr Ayesha Verrall announced today. Around 5% to 10% of babies are born with a tongue-tie, or ankyloglossia, in New Zealand each year. At least half can ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Prisoner disorder event at Waikeria Prison over
    The prisoner disorder event at Waikeria Prison is over, with all remaining prisoners now safely and securely detained, Corrections Minister Kelvin Davis says. The majority of those involved in the event are members of the Mongols and Comancheros. Five of the men are deportees from Australia, with three subject to ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Pre-departure COVID-19 test for travellers from the UK and the US from 15 January
    Travellers from the United Kingdom or the United States bound for New Zealand will be required to get a negative test result for COVID-19 before departing, and work is underway to extend the requirement to other long haul flights to New Zealand, COVID-19 Response Minister Chris Hipkins confirmed today. “The new PCR test requirement, foreshadowed last ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • PM congratulates New Year Honour recipients
    Prime Minister Jacinda Ardern has added her warm congratulations to the New Zealanders recognised for their contributions to their communities and the country in the New Year 2021 Honours List. “The past year has been one that few of us could have imagined. In spite of all the things that ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • David Parker congratulates New Year 2021 Honours recipients
    Attorney-General and Minister for the Environment David Parker has congratulated two retired judges who have had their contributions to the country and their communities recognised in the New Year 2021 Honours list. The Hon Tony Randerson QC has been appointed a Companion of the New Zealand Order of Merit for ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Year’s Honours highlights outstanding Pacific leadership through challenging year
    Minister for Pacific Peoples Aupito William Sio says the New Year’s Honours List 2021 highlights again the outstanding contribution made by Pacific people across Aotearoa. “We are acknowledging the work of 13 Pacific leaders in the New Year’s Honours, representing a number of sectors including health, education, community, sports, the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Supporting seniors to embrace technology
    The Government’s investment in digital literacy training for seniors has led to more than 250 people participating so far, helping them stay connected. “COVID-19 has meant older New Zealanders are showing more interest in learning how to use technology like Zoom and Skype so they can to keep in touch ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Additional COVID-19 tests for returnees from higher risk countries
    New virus variants and ongoing high rates of diseases in some countries prompt additional border protections Extra (day zero or day one) test to be in place this week New ways of reducing risk before people embark on travel being investigated, including pre-departure testing for people leaving the United Kingdom ...
    BeehiveBy beehive.govt.nz
    3 weeks ago