Latest / The SME Stream / Nicola Willis Finance Minister talks options for making Kiwibank a bigger player

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Nicola Willis Finance Minister talks options for making Kiwibank a bigger player · The SME Stream

• 0:02
  Speaker 1: We're a business meets Insight for the business hour.
• 0:06
  Speaker 2: We're headed due to Clan and my hr on newsb.
• 0:13
  Speaker 1: Evening. Coming up with the next hour, We're going to
• 0:14
  Speaker 1: have a chat to Sean Soley on the supermarket, the
• 0:17
  Speaker 1: share market rather volatility that we're seeing at the moment.
• 0:19
  Speaker 1: I've got a litt update for you on that. Hugh
• 0:21
  Speaker 1: Whites from Australia in studio with me on whether Orcust
• 0:24
  Speaker 1: will actually provoke war. I'm going to check in with
• 0:26
  Speaker 1: our UK correspondent on whether to expect more riots overnight.
• 0:29
  Speaker 1: It's coming up eight past six and with us right now,
• 0:31
  Speaker 1: we've got Nichola Willis, the Finance Minister evening.
• 0:33
  Speaker 2: Nikola, good evening, Heather.
• 0:35
  Speaker 1: So what's your preferred option for how are you going
• 0:37
  Speaker 1: to recapitalize Kiwibank?
• 0:40
  Speaker 2: Well, look, there are several options that we want to consider.
• 0:45
  Speaker 2: When I look at Kiwi Bank, I see an opportunity
• 0:49
  Speaker 2: to grow it so that it can take on the
• 0:51
  Speaker 2: Australian Bank, the Commerce Commission, who's been looking at banking
• 0:54
  Speaker 2: competition in New Zealand at ce yup, there's a pretty
• 0:57
  Speaker 2: cozy ologopoly at the top there with a big four
• 1:00
  Speaker 2: banks and Kiwibank is best place to be the maverick,
• 1:04
  Speaker 2: the disruptor who could take on those big four banks.
• 1:08
  Speaker 2: But that would require it to have more investment in
• 1:10
  Speaker 2: it in the future so it could grow. I don't
• 1:13
  Speaker 2: need to tell you that as a government we don't
• 1:15
  Speaker 2: have huge amounts of spare cash sitting around. But you
• 1:19
  Speaker 2: know what, there are key we saver funds, there are EWE,
• 1:22
  Speaker 2: there's the super Fund, there's acc who are always looking
• 1:26
  Speaker 2: for good New Zealand based investments, and I say, let's
• 1:29
  Speaker 2: have a look there.
• 1:30
  Speaker 1: For would you consider opening it up to mum and
• 1:32
  Speaker 1: dad investors on the share market.
• 1:35
  Speaker 2: I think that's something that we should consider and I'd
• 1:39
  Speaker 2: like to take advice on that option.
• 1:41
  Speaker 1: Okay, if you were to sell it to the likes
• 1:43
  Speaker 1: of or sell part of it to the likes of
• 1:45
  Speaker 1: super Fund and so on, would you tie their hands
• 1:48
  Speaker 1: so that they were unable to onsell it to foreign investors.
• 1:52
  Speaker 2: Well, just to be clear, in the first instance, I'm
• 1:54
  Speaker 2: not proposing actually to sell the government to share it
• 1:58
  Speaker 2: or what I'm saying is let's stick with the money
• 2:00
  Speaker 2: the government already hasn't it, and add to that with
• 2:03
  Speaker 2: new capital, which is a slightly different thing, because this
• 2:06
  Speaker 2: isn't I'm not motivated here about trying to get cash
• 2:08
  Speaker 2: out of keep we back. That's not what I want
• 2:10
  Speaker 2: to do. I want to grow it, so I want
• 2:12
  Speaker 2: other people to be able to put cash in it.
• 2:14
  Speaker 2: But the question you ask is a good one, which
• 2:16
  Speaker 2: is on what terms would a new investor want to
• 2:19
  Speaker 2: make that investment. And that's obviously something I need to
• 2:23
  Speaker 2: take more advice on and consider. And what I said
• 2:26
  Speaker 2: at the weekend was let's do that. Let's put that
• 2:29
  Speaker 2: on the table. Let's talk about what would be needed
• 2:31
  Speaker 2: to grow that little bank that could into something big
• 2:35
  Speaker 2: enough to take on the big gal.
• 2:36
  Speaker 1: I mean, is that going to be terms acceptable to
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  Speaker 1: the likes of the super Phone, because isn't that actually
• 2:40
  Speaker 1: why they pulled out in the first place, and Grant
• 2:43
  Speaker 1: Robinson had to chuck two point one billion in to
• 2:45
  Speaker 1: cover them because they didn't want to be to have
• 2:47
  Speaker 1: their hands tied like that.
• 2:50
  Speaker 2: Look, I understand that those were some of the issues,
• 2:52
  Speaker 2: So I'm interested to look at what are the basis
• 2:55
  Speaker 2: on which people would want to invest, And maybe that
• 2:58
  Speaker 2: would be that private market would consider investing if they
• 3:02
  Speaker 2: knew that there was going to be an initial public
• 3:04
  Speaker 2: offering to New Zealanders mums and dads down the line,
• 3:08
  Speaker 2: let's have a look at what that scenario could be,
• 3:11
  Speaker 2: for example. But the basic goal here is let's accelerate
• 3:14
  Speaker 2: the growth of Kiwi Rail. Make it so it's not
• 3:17
  Speaker 2: Kiev Rail bank. While you're at it, make it more
• 3:20
  Speaker 2: disruptive and make it more disruptive to the Australian banks.
• 3:24
  Speaker 2: And for one really good reason, I want affordable, fair
• 3:28
  Speaker 2: banking services for New Zealanders and the evidence from the
• 3:31
  Speaker 2: Comments Commission is they're not getting as good a deal
• 3:33
  Speaker 2: as they should right now.
• 3:35
  Speaker 1: Yeah, is when he going to be okay with this?
• 3:36
  Speaker 1: Because he's not been a big fan of getting private
• 3:39
  Speaker 1: money involved in public assets, is he?
• 3:42
  Speaker 2: Well, I'd be careful to say that Cabinet hasn't taken
• 3:44
  Speaker 2: any decisions on this. But what I flagged at the
• 3:47
  Speaker 2: weekend was I think this is something we should be
• 3:50
  Speaker 2: thinking about. I'm gathering advice on it and I haven't
• 3:53
  Speaker 2: taken any recommendations to cabinet yet, so I wouldn't get
• 3:57
  Speaker 2: ahead and stage wash and Peter's, or indeed any of
• 4:01
  Speaker 2: my other cabinet colleagues think about it yet. I think
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  Speaker 2: the first thing is to have the options on the
• 4:06
  Speaker 2: table and consider the costs and benefits of each.
• 4:10
  Speaker 1: You'll have a problem, Nicola, I don't reckon you'll have
• 4:12
  Speaker 1: a problem because I heard he really likes you, so
• 4:14
  Speaker 1: he probably listens to you.
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  Speaker 2: Well, I really like him. I really like him too,
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  Speaker 2: because he contributes wisdom and he contributes reflected.
• 4:24
  Speaker 1: This is the right approach to take with him. And
• 4:26
  Speaker 1: then he'll he'll just bend over. He'll say yes if
• 4:28
  Speaker 1: you flatter him.
• 4:29
  Speaker 2: Well, I think the wonderful thing about a truly respectful
• 4:32
  Speaker 2: relationship is you well understand is you don't necessarily always
• 4:36
  Speaker 2: agree with each other. And that is going to be
• 4:39
  Speaker 2: the case with me and Winston Peters from time to time.
• 4:44
  Speaker 2: But this, I think is a proposal that could have legs.
• 4:47
  Speaker 2: I want to explore it, see if it does, and
• 4:50
  Speaker 2: then if it does, then that's an idea that I
• 4:53
  Speaker 2: would bring to cabinet.
• 4:53
  Speaker 1: Good stuff now, listen. Sewan Sweeney of the CRL and
• 4:57
  Speaker 1: Auckland has given an exit interview saying that political spats
• 4:59
  Speaker 1: and driving up the cost of infrastructure and that the
• 5:02
  Speaker 1: way to bring down the cost is to stop political fights.
• 5:04
  Speaker 1: Is that even possible? Could we do that.
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  Speaker 2: I think we could do more of that. You know,
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  Speaker 2: obviously there are going to be some projects which we
• 5:12
  Speaker 2: have to agree to disagree on, and I think our government,
• 5:16
  Speaker 2: for example, made the right decision saying we're not going
• 5:19
  Speaker 2: a hue with light railroad, so you.
• 5:20
  Speaker 1: Would though, right. But now the labor guys say that's
• 5:23
  Speaker 1: the wrong decision. So how do you square that circle?
• 5:25
  Speaker 2: Yeah? I think the way we square it is let's
• 5:27
  Speaker 2: look out over thirty years and think about all of
• 5:30
  Speaker 2: the infrastructure we need to build across our transport system,
• 5:33
  Speaker 2: our health system, education system. If we could agree on
• 5:37
  Speaker 2: ninety percent of that across the big parties, that would
• 5:42
  Speaker 2: provide massive certainty to the construction firms, investors and the like.
• 5:48
  Speaker 2: And this is what Chris Bishop, our Minister for Infrastructure,
• 5:51
  Speaker 2: is going for. He is working to get together a
• 5:54
  Speaker 2: thirty year infrastructure pipeline plan to provide some clarity over
• 5:58
  Speaker 2: that and to her that the opposition finance spokesperson has
• 6:02
  Speaker 2: indicated that the Labor body is more interested in bipartisanship
• 6:07
  Speaker 2: in that infrastructure planning space. So let's see what we
• 6:10
  Speaker 2: can do.
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  Speaker 1: Yeah, but okay, that's fine. I mean, Barbara over at
• 6:13
  Speaker 1: Labour seems like a reasonable bird. But what are you
• 6:15
  Speaker 1: going to do about Julianne and the Greens? I mean,
• 6:17
  Speaker 1: she doesn't even like a road right, how are you
• 6:19
  Speaker 1: going to do that?
• 6:20
  Speaker 2: Look, even though I'm not smart enough to solve the problems,
• 6:23
  Speaker 2: it's green. I mean, can you tell me you're going
• 6:28
  Speaker 2: to ask me to solve that one today? In that
• 6:30
  Speaker 2: that's bigger issues. That's bigger issues, the two big main
• 6:34
  Speaker 2: parties that come to a contentus. That'd be pretty powerful.
• 6:38
  Speaker 1: Yeah, fair enough. Hey, listen, do you agree with John
• 6:40
  Speaker 1: Key that the Treaty Principles Bill is bad policy?
• 6:44
  Speaker 2: Well, obviously we didn't campaign on it and we didn't
• 6:47
  Speaker 2: support it. That's well known. Well, we have a coalition
• 6:51
  Speaker 2: agreement in which we said, yep, we'll put that to
• 6:54
  Speaker 2: a Select Committee hearing, and that's the agreement. We've done
• 6:57
  Speaker 2: with that, and so we're going to stick to that agree.
• 7:00
  Speaker 1: Seymour reckons that he might be able to change your
• 7:02
  Speaker 1: mind though if it proves to be actually a great
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  Speaker 1: idea and very popular. Can he?
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  Speaker 2: Oh? Well, he's ever be optimist, isn't he?
• 7:09
  Speaker 1: Nicola? Thank you very much appreciated. Nichola Willis, Finance Minister