Ambitious Kiwibank eyes Govt contract

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Kiwibank has the "ambition" of taking over the Government's huge banking contract from its big Australian-owned rivals, but is not ready to do so yet, it said yesterday.

The Green Party yesterday called for state-owned Kiwibank to become the Government's banker, a role filled by Westpac for the last 20 years.

KiwiBank spokesman Bruce Thompson told the Herald the bank "has the ambition but not the capability" to take the government's "master banking contract".

However Kiwibank would probably be in a position to tender for the contract in about 10 years' time.

Greens co-leader Russel Norman hailed National's decision late last year to open up the contract to a "competitive" procurement process as a victory for his party.

But the Greens want that process to include a "national interest" test where banks would have to demonstrate their contribution to the economy. They expected that would give Kiwibank and other locally-owned banks a chance to win at least some of the Government's business.

In the meantime the Greens would allow Kiwibank to reinvest more of its profits back into its business to build up the capital and capability to better compete with Australian-owned banks for the Government contract and a bigger slice of the wider market.

Dr Norman said John Key's National Government and its Labour predecessors had shown a lack of courage in failing to ensure New Zealand got a fair go from the Australian banks, who control 95 per cent of the industry.

"The Green Party is serious about fixing our banking system so that we are no longer mortgage slaves to the Aussie banks," the Queenslander who now calls New Zealand home told the Greens' annual meeting yesterday.