NEW Zealand First, the populist political party that shares ideas in common with Pauline Hanson’s One Nation, is on a rapid rise in New Zealand, according to opinion polls.
As a third party force, NZ First has surged past the Greens, who like their Australian counterparts, are simply a cultural Marxist arm of the Labor Party.
Led by the political veteran Winston Peters NZ First, with 15 seats in the Parliament, shares government with the libertarian ACT (8 seats) party and the so-called “centre right” National Party (39 seats). National is the Kiwi version of Australia’s Liberals, led by Prime Minister Christopher Luxon.
Peters is also surging in polls as a preferred prime minister, up to 11.6%. Luxon reclaims the top spot, gaining 1.0 point to 21.5% while Labor leader Chris Hipkins fell 2.7 points to 19%.
Peters has set the media and various economic experts chatting furiously by proposing that the NZ government buy the Bank of New Zealand (BNZ) and merge it with Kiwibank Limited, New Zealand’s state-owned bank and financial services provider. As of 2023, Kiwibank is the fifth-largest bank in New Zealand by assets.
Luxon himself, a so-called free-market economic rationalist, has poo-poohed the idea, claiming it’s not feasible, along with David Seymour, leader of ACT.
Consensus economic opinion canvassed by media says the buyback would cost about NZ$24 billion and that Kiwibank would be better served by “an injection of private capital”. Peters will announce the funding mechanism for the plan during the election campaign but has already posted an outline on his party website (see below)..
NZ First wants to make KiwiSaver enrolment compulsory at birth and there will be an automatic immediate Crown contribution of $1000 for New Zealand citizens only. This is a once-per-lifetime investment that compounds for decades.
Universal birth enrolment will ensure every child begins their financial life as a KiwiSaver member, with a meaningful balance already growing on their behalf.
This new policy will work in conjunction with our existing campaign policy of compulsory KiwiSaver enrolment for the wider workforce and increasing employee and employer contributions to 8% initially and eventually to 10%.
Four Australian owned banks control around 85 percent of the system. They lend our deposits back to us at margins that are materially higher than those earned by their parent groups in Australia. Billions of dollars of profits a year that flow across the Tasman.
New Zealand First will be proposing a buy-back of the Bank of New Zealand from National Australia Bank, which bought BNZ in late 1992 in a deal valued at what now seems like a paltry NZ$1.48 billion with key sellers being 57.3% shareholder the NZ government, and 27% holder Fay, Richwhite.
It will be merged with Kiwibank to form the National Bank of New Zealand (NBNZ) – a fully Crown (NZ government) owned, commercially run, systemically significant domestic bank with the scale to properly compete with ANZ, ASB and Westpac.
The National Party government sold BNZ to NAB in November 1992, when privatisation (globalisation) hysteria was at its peak. The bank then had six of every ten New Zealand banking customers.
Peters and NZ First say the purchase would create real competitive pressure on the Australian-owned banks – a domestically owned strategic lender capable of supporting agriculture, infrastructure, and small to medium enterprises growth on long-horizon terms.
Kiwibank, the only domestically owned bank of any scale, currently holds just under 8 percent of the mortgage market.
The Commerce Commission 2024 Personal Banking market study, showed a structurally uncompetitive market in which the major banks face no sustained pressure to compete on price, no realistic threat of new entry at scale, and no domestic ownership accountability.
Kiwibank was created in 2002 precisely to provide a domestic challenger. But after two decades it remains a marginal player.
Successive governments have starved it of the capital it would need to be a genuine system-shaping competitor.
“The National Bank of New Zealand would not be a government department. It would be a fully commercial bank with a Crown shareholder, but run on new management structure which we will outline in upcoming campaign announcements,” NZ First says on its website.
“The National Bank of New Zealand would exist to keep the major Australian banks honest and to keep New Zealand banking profits in New Zealand.
“The buy-back of the BNZ would not be funded from the operating budget. A blended funding stack would include:
- A New Zealand Sovereign Banking Bond issuance, marketed to domestic retail and KiwiSaver investors as a direct economic-sovereignty instrument.
- Long-dated Crown debt at current sovereign rates. BNZ currently generates more than $1.5 billion in annual cash earnings – comfortably servicing the debt and returning a surplus to the Crown.
- A limited tranche of the NZ Future Fund and ACC investment, structured as a commercial equity at arm’s length and a market rate of return.
- Retention of Kiwibank’s existing capital base.
“The buy-back is self-financing in expectation. The fiscal impact is a one-off balance-sheet expansion, not an ongoing cost. This is not nationalisation – this is taking back our country,” says Peters.
“Crown-owned commercial banks operating at scale are not radical. They are normal in serious economies – Singapore, Norway, Germany, Canada, France, all have large-scale state-owned banks that have serious stakes in the market.”
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