The case against selling (some of) Kiwibank: Another Op-Ed from CICTAR Researcher Ed Miller

CICTAR’s Ed Miller gives the counterargument to recent calls for part sale of Kiwibank.

Ed writes: “(t)here seems to be widespread agreement on the need for capitalisation (of Kiwibank), but disagreement on how to achieve it. Government could capitalise it directly, but the ground is beng prepared for a share sale.

However, if we want Kiwibank to live up to ComCom’s disruptor dream, then it needs to do more than just match the prevailing returns in the market. It needs to beat them, and that means having lower interest margins than the Big Four.

And lower margins also mean lower returns for shareholders. 

Private shareholders can’t settle for this so easily, but the state can, provided it meets other policy objectives.”