The Government’s plan to sell Kiwibank to the New Zealand Superannuation Fund and ACC Fund for $495 million could end up costing taxpayers between $800 million and $1.1 billion to buy back, the Green Party said today.
Analysis done by the Parliamentary Library using two different valuation methods comes up with a cost to buy back Kiwibank in five years’ time at $800 million to $1.1 billion dollars.
“The sale of Kiwibank could end up being extremely costly for taxpayers. We estimate that a future Government could have to pay at least $800 million to buy back the Kiwibank shares in five years’ time,” said Green Party Co-leader James Shaw.
“A future Government may balk at having to fork out $800 million or more to buy back the shares, at which point they’ll be offered to the market.
“National’s announcement is already being viewed in financial markets as a precursor to Kiwibank’s privatisation.
“There is already analysis that Kiwibank shares are being sold well below market value. We can be sure that the Super Fund and ACC Fund won’t be selling them at charity rates in five years’ time.
“Far from being an elegant solution, this is a financial rort.
“National’s plan is a short-term cash-grab with long-term consequences for the ownership and value of Kiwibank.”
The Green Party would invest $100 million now to strengthen and grow Kiwibank. The plan will drive greater competition across the banking sector creating massive spill-over benefits for all lenders and depositors. Across the economy, the mortgage savings alone translate into savings of $312 million per year. This initial $100 investment (and more) would be returned to the Government, over time, in the form of dividends and increased tax receipts.
“We’d invest $100 million now to strengthen and grow Kiwibank. The National Government is proposing to invest nothing into Kiwibank now and face an $800 million plus bill in five years’ time to simply ensure New Zealand ownership in Kiwibank,” said Mr Shaw.
“The other major benefit of the Green’s plan is that we’ll own Kiwibank in five years’ time, in ten years’ time, in twenty years’ time.”
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