NZ Post shrugs off dip in Kiwibank support

By VERNON SMALL AND NZPA

New Zealand Post is not fazed by declining support for its planned Kiwibank disclosed in a survey this week.

The University of Auckland Business School study found only 19 per cent of residential bank customers would consider doing business with the bank, down from 40 per cent last year.

But NZ Post chief executive Elmar Toime told a select committee today that last year's poll had shown an extraordinarily high level of customer dissatisfaction with existing banks, and was an aberration.

This week's survey was more in line with earlier polls.

The survey showed 69 per cent of customers were either satisfied or very satisfied with their banks, up from 63 per cent last year, 61 per cent in 1999 and 68 per cent in 1998.

Mr Toime and chairman Dr Ross Armstrong told the committee that Kiwibank would be viable with 100,000 customers and was expected to break even in 2004-2005, with 165,000 customers.

They said the bank might need more capital if it proved a big success, but NZ Post had assured ministers it would not seek more money from the Government. Dr Armstrong said the failed attempt in February to recover a leaked copy of the business plan from Act leader Richard Prebble was not aimed at gagging an MP or stifling public debate.

NZ Post was concerned that Mr Prebble would release information about security at Kiwibank branches.

National MP Murray McCully renewed his long-running attack on the decision to take court action against Mr Prebble.

Mr Armstrong said Mr Toime briefed him on February 21 and the board was advised at a meeting later that morning. He considered that the decision to take action against Mr Prebble was technically in the hands of management.

But if the board had raised objections the issue could have been discussed and Mr Toime could potentially have changed his stance.

"No dissent was voiced by any member of the board about proposed litigation," Mr Armstrong said.

He agreed that silence was taken as consent.

A suggestion by Mr McCully that only three other board members were present was denied by Mr Armstrong.

Mr McCully also alleged that minutes of the February board meeting were amended to make it look as though the board had approved of the decision to take Mr Prebble to court.

Dr Armstrong rejected the allegation.

He said that while the minutes had been subject to an "elaboration" at a later board meeting, it was normal in organisations for minutes to be amended before they were approved as an accurate and true record.

Dr Armstrong told New Zealand First leader Winston Peters that he had suggested to Prime Minister Helen Clark that former Prime Minister Jim Bolger be appointed to chair the bank.

Mr Peters asked whether the appointment was "hypocritical" as Mr Bolger had said after the collapse, bailout and sale of the Bank of New Zealand that the Government should not be in the business of banking.

Dr Armstrong defended his recommendation, saying there was no comparison between BNZ and Kiwibank. The latter was more people-oriented.

He said Mr Bolger "understood the constituency" of the bank - that constituency being rural and provincial New Zealand.