by Chris Leitch
The move by Finance Minister Grant Robertson to take full government control of Kiwibank is fantastic news – for the bank’s customers and the New Zealand economy.
The bank faced the very real prospect of having some of its shares sold off to private investors had the NZ Superfund been allowed to increase its stake, likely an overseas owned bank.
Full government ownership ensures the bank’s profits remain in the NZ economy and are available for the government to spend on things like health care. It also ensures the country’s banking sector is not totally dominated by overseas owned banks whose massive profits put an enormous strain on the economy as they are exported to their overseas shareholders.
Sadly Grant Robertson has chosen to borrow the funds necessary to take full ownership of the bank instead of using the bank the government already owns – the Reserve Bank – which could have funded the purchase at no cost to taxpayers.
That option was recommended to him in an aide memoir written by the Treasury and the Reserve Bank in May 2020. Instead, taxpayers will be paying interest to the commercial banks that will create the money they lend to the government out of thin air, like fairy dust.
That taxpayer money should instead be going into healthcare, housing, reducing poverty, and education. Mr Robertson could still use Reserve Bank funding if he wants to put services for kiwis ahead of profits for oversees bank shareholders.