New Zealand First leader Winston Peters says his party's proposal to buy back the Bank of New Zealand would return control of the country's banking system and deliver long-term benefits despite concerns over cost and feasibility.
Peters on Sunday announced a policy to automatically enrol all newborn citizens into KiwiSaver with a $1000 government contribution, alongside the proposal to buy back the Bank of New Zealand and merge it with Kiwibank to create a new state-owned bank.
He said the new entity, to be known as the National Bank of New Zealand, would be commercially run and designed to compete with the major Australian-owned banks.
Asked how this would be funded, Peters told Breakfast New Zealand had a need to “recalibrate" its approach to debt.
“We pay far too much costly debt everywhere… This is a world awash with money,” he said.
“New Zealand is one of those countries more likely to get investment because of the stability of our democracy.”
Peters also insisted estimates placing the cost between $10 billion and $20 billion were wildly inflated.
He suggested the bank could potentially be acquired for "something above $7.5 billion", arguing critics misunderstood both New Zealand First’s financing strategy and the current state of the Australian economy.
The New Zealand First leader said giving every newborn $1,000 for KiwiSaver and reclaiming BNZ from Australian ownership were long-term investments in national wealth. (Source: Breakfast)
Peters described the proposal as an "investment" rather than a cost and accused previous governments of selling national assets too cheaply in the 1980s and early 1990s.
NAB purchased BNZ in late 1992 in a deal valued at NZ$1.48 billion.
"When it was sold, six out of 10 banking customers were with BNZ. It was flogged off by a bunch of neoliberal nitwits and twits," he said.
He argued foreign ownership of major banks drained value from the local economy.
"Why are we paying all this money to an Australian bank to run parts of our economy… when we should and used to do it ourselves?"
The proposal drew criticism from Finance Minister Nicola Willis, who described it as "extremely reckless" and unaffordable without significant tax increases or additional borrowing.
Peters responded by accusing critics within National of failing to properly understand the policy.
"My advice… is how about you read the speech first, or better still get someone to explain it to you before you make comments," he said.
The proposal would see it merge with Kiwibank to form the National Bank of New Zealand. (Source: 1News)
The BNZ plan sits alongside another New Zealand First policy: a $1000 government contribution to every newborn’s KiwiSaver account.
Peters estimated it would cost about $50–60 million per year, describing it as a modest investment with long-term payoff.
“This is not a debt matter, it’s an investment… People start off from day one as investors,” he said, pointing to countries like Singapore as examples of how strong national savings systems can underpin economic growth.
Two ways the Government could acquire BNZ - expert
Massey Business School Professor Claire Matthews said in a statement to 1News there were two options available to the Government if it wished to acquire BNZ.
"The first is to have a ‘willing seller’ or negotiated sale, where NAB would have the ability to decline the sale, and to negotiate the price to reflect the true market value of BNZ."
She said she would expect the market value of BNZ to be "well in excess" of its current book value of $13.7 billion.
"The second option is for the government to simply tell NAB they are buying the BNZ from them and at what price. In that case, the price is likely to be closer to the book value, which is realistically the minimum the Government could pay, unless it really wants to scare off international companies."
SHARE ME