Labour leader David Cunliffe has announced plans to set up a state insurance company alongside KiwiBank to offer home, contents and vehicle insurance.
Mr Cunliffe announced plans for "KiwiAssure" in his first address at the Labour Party conference in Christchurch today.
Mr Cunliffe arrived on stage to a standing ovation and Minuit's Aoteroa booming, with red disco lights flashing over the audience. His two predecessors, David Shearer and Phil Goff stood and applauded in the front row, alongside other MPs. He wandered over the stage as he spoke, rather than behind a lectern and blew a kiss to his mother.
He spoke about his childhood as the son of a vicar. "We have all heard about our current Prime Minister's own humble beginnings, his overseas success and his money trader's fortune. But in aspiration and core beliefs, John Key and I could not be more different."
He launched into an attack on National, listing its "Hall of Shame" as Warner Brothers, SkyCity, Rio Tinto and Chorus.
"This government is tired, arrogant, and out of touch."
He also focused on boosting the manufacturing industry by measures such as giving preference to New Zealand made and processed timber for the Christchurch rebuild.
The big policy announcement of the speech was KiwiAssure - the working name for the insurance company.
He said that after the Christchurch Earthquakes, Cantabrians struggled to get claims approved and homeowners around the country faced more restrictive, more expensive cover. He was also frustrated that profits went overseas.
He said he believed a locally-owned insurance competitor would help drive down premiums, even though it would have the same reinsurance costs as others. That was because it would be trying to attract new customers and would not face the same pressure to maximise dividends for offshore investors.
Mr Cunliffe said there would be a capital cost in setting it up, which the Government was prepared to support. That was not yet known, but was likely to be less than the $80 million to establish KiwiBank in 2001.
Tapping into the KiwiBank structure would help costs down, because it could be offered through local branches.
Mr Cunliffe said that the establishment of KiwiBank had been successful in introducing competition to the banking sector, resulting in lower fees and better service. "Now the time has come to extend the KiwiBank model into general insurance."
He said, subject to a business case by parent company NZ Post, KiwiAssure would be a sister company to KiwiBank. It would be set up through an expansion of its existing Kiwi Insurance Ltd, through which KiwiBank offered life insurance.
"With 90 per cent of the insurance sector owned by overseas interests, a Labour government will ensure Kiwis can choose to keep profits from this critical industry in New Zealand."
The Insurance Council had estimated that the household insurance market collected $1.17 billion in home and content premiums each year and $1.36 billion in vehicle insurance - most of the profits of which went offshore.
He ended with a rallying cry for the party members to get behind him for the campaign, saying Labour needed to win back the support of the regions as well as those who had not voted last time.