Kiwibank at top of Nats' sale list

Finance Minister Bill English yesterday singled out Kiwibank as an particularly attractive asset for buyers. Photo / Marty Melville

The National Government has given its strongest indication yet that it will sell state-owned assets should it get a second term.

Finance Minister Bill English yesterday singled out Kiwibank as a particularly attractive asset for buyers.

But he said the Government would not sell assets without a mandate from the public.

Mr English, fresh from delivering the 2010 Budget, told a gathering of South Island business people yesterday that the Government might consider a change of policy "to free up capital and put product on the market for Kiwi mums and dads".

Kiwibank was a good example of an asset that needed to be dealt with. It had reached the size where it needed either a Government guarantee or an "awful lot of capital".

"If there's any asset that's regarded as risky by credit rating agencies, it's a small, fast-growing bank," he said.

"So one option would be to go to the market and raise capital. Keep majority Crown ownership, but raise the rest of the capital from the market.

"It would certainly help us to be able to free up that capital. But we've made undertakings to the public and we certainly won't move anywhere without getting a mandate to do so."

Asked who would support that, only a few audience members raised their hands.

Partial sale of state-owned assets, including power companies, was one of the main recommendations from the Labour-initiated capital markets development taskforce last year.

But National set it aside, saying it would stick to its election policy of no state asset sales in its first term.

A spokesman for Mr English said last night that National's position had not changed and if it did, "everyone will know and the Government will campaign on it at the next election".

Labour leader Phil Goff said state-owned asset sales were "absolutely all on" if National won a second term, "and they might not even wait until then".

Mr Goff said New Zealand's four big banks were privately owned "and they send huge amounts of profit out of this country".

"People go to Kiwibank precisely because it is New Zealand owned and community owned; that's its strength."

A spokesman for Kiwibank, which promotes itself on its New Zealand ownership, said any possible sale was an issue "for the owner, not for the company".

Progressives leader Jim Anderton, who pushed for the creation of Kiwibank in the late 1990s, said selling it would be "economic vandalism".

"Kiwibank is a huge success, mainly because it's ours. Selling the bank would push it straight into overseas hands. The buyers would be the Australian banks."

Mr English denied his comments were part of a softening-up process before asset sales and said he was just outlining the Government's position.

"It's not an issue we have been focusing on. We've been focusing on improving the management of the $200 billion of assets we currently own."

In February, Kiwibank reported a 9 per cent drop in half-year profit to $23.5 million, although its total assets rose.