You may have missed it since it was announced last night and is already off the front page of stuff, but Winston Peters has announced some interesting plans for Kiwibank.
The main points are
- A partial float of Kiwibank where only New Zealanders are allowed to own shares
- Using Kiwibank for all of the government’s business.
The argument underlying these two points is profits leaving the country are bad. This argument is probably one of my pet hates as there is nothing stopping you buying shares in the company that owns the asset to bring the profits back into the country. In addition one has to worry about efficiency when you guarantee Kiwibank a gigantic customer. What incentive does Kiwibank have to be competitive with respect to the government contract if they ahve no chance of losing it?? Presumably if the government thought Kiwibank would give it the best price/quality contract they would already be doing their business through Kiwibank.
I’ll leave Matt to comment on the BERL report he mentions as Macro is mostly gibberish to me. However if Winston Peters agrees with it, that raises some serious red flags for me!