Debate on Crown Entities, Public Organisations, and State Enterprises — New Zealand Post Ltd

If members were to give me $1 and I was to promise them that I could turn it into $10 over 8 years, would they invest with me? Absolutely, if I was going to turn $1 into $8 over 10 years. I tell members that that is what Kiwibank has done. With an initial investment of $80 million, this bank is now worth $800 million by some valuations. The National Government wants to sell Kiwibank. Those who doubt this must have their heads in the sand.

Some of my colleagues have outlined the economic and financial reasons for not selling Kiwibank; members could write a book about these. A few of them have been outlined by Mr Mallard and Mr Cunliffe, but I will outline a few philosophical and social reasons why this bank should not be sold. Why would we sell it? We are talking about a bank—Kiwibank—that was set up by the Government in 2002. It was set up against strong opposition from the National Party, but it was set up because there was a belief that the major Australian banks were gorging profits off ordinary New Zealanders and that we needed to have a say in our market. We needed to have some influence. Kiwibank was Jim Anderton’s vision backed up by the passion of the previous Labour Government for New Zealand and for New Zealanders.

It is a fact that the four major Australian banks send profits offshore that are greater than the entire profit of all the companies listed on the New Zealand Exchange. About $2.6 billion in profits is made from Kiwis and sent offshore annually by the Australian-owned banks. Kiwibank returns profits to New Zealanders—to us, the New Zealand taxpayers. The Inland Revenue Department recently reached a settlement worth close to $2 billion against the four major Australian banks over tax avoidance. If Kiwibank had been owned offshore that would have been five banks, but Kiwibank is our bank.

How many New Zealanders do members think have invested in Kiwibank? How many New Zealanders do members think have put money directly into Kiwibank?

💬 Hon Member: Thousands.

Thousands? Five hundred thousand? Eight hundred thousand New Zealanders have put their money in a bank set up by New Zealanders for New Zealanders. This is our bank. I have accounts with Kiwibank. I believe the competition it has brought to the market was not only good but vital. I support that competition, and 800,000 other Kiwis also supported it.

💬 Dr Rajen Prasad: Local branches, too.

Absolutely. It is estimated that Kiwibank has saved New Zealanders around $1 billion in interest payments due to the increased competition it has brought to the market, yet Bill English and John Key want to sell it.

Why would we want to sell Kiwibank? God knows. Perhaps it is to pay for the tax cuts for the wealthiest in society. For example, as we know, the chief executive of Telecom has just received $1,650 per week extra in the hand, whereas a person on the median wage in Napier is about to receive $3 a week after GST.

💬 Dr Rajen Prasad: Don’t be jealous!

Yes. Is this why Kiwibank is being sold? I tell members on that side of the Chamber that all New Zealanders are now saying “Enough!” to asset sales. Labour will fight the sale of Kiwibank to the bitter end—make no bones about that.

Are we surprised that the Government is now talking about asset sales? Well, listen to this from Bill English. During the 2008 election Bill English said that National would sell Kiwibank eventually but not now. There is no ambiguity there. The day after the Budget this year, Bill English floated the idea of selling Kiwibank in a speech. He believes there will be a strong demand among mums and dads for a Kiwi investment model, and if we put product into a market people will buy it. Why do they need to buy Kiwibank? They already own it. It is our bank. It is owned by every single New Zealander. Kiwibank is New Zealand - owned, as all its advertisements say. It is the only bank in this country that can say that it is 100 percent New Zealand - owned. I wonder whether the decision of the Minister of Finance, Bill English, to raise the issue of the sale of Kiwibank the day after the Budget was an attempt to foster debate about asset sales. Maybe it was an attempt to foment trouble with his leader.

What does his boss have to say about this? John Key talks with a forked tongue, and I suspect that sometimes he does not know whether he is Arthur or Martha. For example, John Key said on at least nine occasions—including May 2007; 5, 6, and 7 August 2008; 21 and 22 October 2008; and 4 and 5 November 2008—that it was National’s policy never ever to sell Kiwibank

💬 Hon Steve Chadwick: Can’t trust him.

Yes, we cannot trust him. Then John Key said that a decision on whether to sell Kiwibank would be made in the second term, if National was re-elected. Which John Key is telling the truth? Is it the same John Key who said that he would not raise GST? That was not ambiguous, and we all know what happened there.

Asset sales represent a huge destruction of Kiwi wealth. The vast majority of Kiwis understand this and that is why polling shows that 80 percent of New Zealanders are against asset sales—80 percent. In fact, 53 percent of Kiwis are not buying National spin, and they actually think that John Key will try to sell our assets. Abraham Lincoln once said: “You can fool some of the people all of the time. You can fool all the people some of the time. But”—I say to Mr Key and Mr English—“you cannot fool all of the people all of the time”. This time New Zealanders can see through the rhetoric, the spin, the smokescreen, and the public relations. New Zealanders know that this Government has a privatisation agenda, and Kiwibank is at the top of that list.

The National Government keeps saying that it will take the sale of State-owned assets to the electorate in 2011. I look forward to that. In fact, I am relishing the prospect of standing on-stage with the National MP based in Napier while he justifies to the good people of Napier the sale of Kiwibank. I cannot wait for that. I would love to attend a public meeting called by National to explain the sale of Kiwibank. I welcome it. I challenge Mr Foss to organise a meeting in Hawke’s Bay to debate the sale of Kiwibank. I cannot wait.

I reiterate that all New Zealanders own Kiwibank—800,000 New Zealanders have put money into Kiwibank, and they have choices. New Zealanders have choices in this market, and 800,000 New Zealanders, at least, have confidence in this bank, unlike that Government, which wants to sell it.

This is a very successful bank from a philosophical perspective, but also it is successful from a social perspective. It is very good at keeping the big four banks honest, because it makes it very difficult for the big four banks to act in unison against the interests of New Zealand consumers. If Kiwibank is sold, there is no doubt whatsoever that it will be sold to offshore interests—no doubt. It will not be a New Zealand bank if it is sold. The only people who are looking forward to that sale are the merchant bankers, who are salivating like wolves waiting for the kill and circling like vultures. They are the same merchant bankers who put the world into the economic recession that we are in at the moment. Well, I can tell those bankers that Kiwibank is not for sale. It is our bank. It is a New Zealand bank, and Labour will fight tooth and nail—tooth and nail—to ensure that Kiwibank remains in New Zealand ownership. If it is sold, all New Zealanders will be losers. Labour will not let Kiwibank be sold. National wants to sell it. Mr Key wants to sell it and Mr English wants to sell it, but Mr Goff will fight tooth and nail to ensure that Kiwibank is not sold.

The retiring Chief Executive of Kiwibank, Sam Knowles, said not to sell it. Former National Prime Minister Jim Bolger said not to sell it, and he was Prime Minister when Ruth Richardson was the Minister of Finance. Jim Bolger said not to sell it. Sam Knowles said not to sell it.

💬 Craig Foss: What role does Mr Cullen have in all this?

The only people who are saying we should sell it are Mr Key, Mr English, and—it sounds like—Mr Foss. They are all saying we should sell Kiwibank. There are economic, financial, philosophical, and social reasons not to sell Kiwibank. I tell Prime Minister Key and finance Minister English to listen to those who know: Dr Cullen, Jim Bolger, and Sam Knowles. Do not sell Kiwibank.

Report noted.

Solid Energy Ltd