Should the Government follow New Zealands example and create more competition in the retail banking sector?
New Zealand’s former deputy prime minster Jim Anderton still gets letters from people who think he’s their bank manager. “They write to me to complain that ‘my’ bank has shut their account or something like that,” he says. It’s years since Anderton was involved with the state-owned Kiwibank. He was never the bank manager but he is credited with its establishment. His Alliance party agreed to a coalition with Labour in December 1999 to form a minority government, on condition it would look at setting up Kiwibank. In 2002, Kiwibank, a subsidiary of New Zealand Post, opened its first branch in a post office in the rural city of Palmerston North. It took on New Zealand’s big five banks, all of which are Australian-owned. Kiwibank has reached targets ahead of time and, seven years after it opened, it claims to be beating the big banks at their own game. Although Kiwibank is still a tiny player, with about 3 per cent market share of deposits, 5.5 per cent of the mortgage market and a far hig
