The Kiwibank Legacy

Michael, Jim’s beaten back every argument against the bank we’ve ever put up. For God’s sake, give him the bloody bank. Annette King to Finance Minister, Michael Cullen 2001

The principled Jim Anderton

By Roger Childs

The country has lost one its most colourful politicians: a man of many parties.

Initially inside the big left wing tent, Jim Anderton rejected the Labour Party’s Rogernomics in 1989 and set up New Labour which he felt was true to the roots and traditional philosophy of the movement.

Later came the Alliance and Progressive, and cooperation with Helen Clark in government. From 1999 to 2002 he was Deputy Prime Minister.

The electors in Sydenham, and later Wigram, kept voting for the man, regardless of his party, returning him to parliament every three years.

Anderton was a key player is the evolution of MMP which recognised for the first time, the support given to minor parties. However, probably his most important legacy is Kiwibank.

The battle for a state owned bank

As part of Helen Clark’s first Labour government, Anderton’s pet project was to set up a state-owned bank to challenge the virtual Australian monopoly.  There were smaller New Zealand owned banks, like the PSIS and the Taranaki Savings Bank, but Anderton wanted a government bank to mix it with ANZ, BNZ, Westpak and National.

Incredibly the government had sold off the BNZ to the National Australia Bank and Postbank to ANZ.

The National Party rubbished the idea of a “Kiwibank” and said that if was set up they would sell it off once they returned to power.

As the quote at the top indicates, Michael Cullen took some convincing, but in the end Kiwbank saw the light of day in 2002.

Kiwibank: It’s ours. Is it yours?

There were plenty of sceptics once it was established. However, New Zealanders warmed to the concept of a financial institution of which they were shareholders, and which didn’t send its profits to shareholders, and across the Tasman.

In the early days its range of banking services was limited, and many “experts” were convinced that it wouldn’t survive. However the bank reached profitability ahead of schedule and its customer base continued to grow.

There was some great advertising on television and in the papers which emphasized that this was NZ-owned, unlike most of the opposition. Kiwis were warned to watch those Aussies!

So Kiwibank was soon offering mortgages, insurance, Kiwisaver, credit cards and overseas currency trading.

When National returned to office in 2008, the bank was an established player in the competitive financial field. It would have been political suicide to sell it off.

A going concern

Today Kiwibank is still state-owned, although the NZ Super Fund has a significant share.

The statistics show how far the bank has come since its tentative beginnings 16 years ago.

  • 2017 Earnings – $375,000,000
  • 2017 profits – $58,000,000
  • Current assets – $20,000,000,000
  • 2016 – 2017 increase in assets – 6.6%

Thank you Jim Anderton!