Finance Minister Bill English expects the Government will net a $300 million to $350 million special dividend from the sale of a 45 per cent stake in Kiwibank.

English told the Larry Williams business hour on NewstalkZB that this will be used to offset other capital demands facing the Government.

English said there was a bit more negotiation to come. "We want to see the price that has been mentioned [$495 million] is the price that gets paid.

"If that occurs then we would be expecting a special dividend in the range of
well probably $300 to $350 million."

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Asked if that would get him to a Budget surplus English replied, "It's like recycling the capital - It won't affect our surplus because of the way we account for it. But ... we've got a big capital budget coming up, as we signaled before Christmas, and this will enable us to offset it to some extent."

He confirmed that NZ Post chairman Sir Michael Cullen was the effective architect of the deal.