The Initial vote on Kiwibank in the Labour-Alliance government in 2000 was 16 Labour against to 4 Alliance for.

I was there when this was reversed, and in 2001 the 4 insurgent Alliance Ministers – Jim Anderton, Sandra Lee, Laila Harre and Matt Robson- received our foundation Kiwbank cards in Jim’s office. New Zealand once again had a popular publicly owned bank to aid its development and counter the strangling grip of the privately owned foreign banks. Finance Minister Cullen said, begrudgingly, that the bank, operating from New Zealand Post premises, would get an $ 80 million loan , but not one cent more. Helen Clark continued her opposition by announcing she would remain an Australian Big 4 customer.

Kiwibank had been a long journey. Why had Alliance members campaigned so long and hard for this goal? Jim Anderton had  spelt out the reason in 1988 as the Lange Labour government continued its crash sale of public assets by putting the Bank of New Zealand with its 20 percent share of the banking sector on the auction block. In a 1988 parliamentary speech that led to his expulsion from the Labour caucus Jim Anderton said:

The sale of State Owned Enterprises transfers ownership, control, wealth and resources from the public sector to the private sector…Once it is sold the policy options available…are almost certainly removed…Even after the worst stock market crash in New Zealand’s history…the Bank of New Zealand made an operating profit of $182 million in the 1987-88 financial year… (it) is virtually a perpetual asset…(and) commands 20 percent of the current financial system”

As a highly capitalised bank the BNZ, meeting its huge taxation and dividends obligations to the government and with its long history in the development of New Zealand as an arm of government, the BNZ limited the destructive side of  private banks and kept profits and investment capacity in New Zealand.

Within a short time, an expanding  Kiwibank kept local branches open, and rapidly attracted customers. It paid back the initial government capital within 3 years. It now has over one million customers, including over 40,000 businesses.

Michael Cullen, resiling from his initial hostility , was to praise Kiwibank in his autobiography as follows:

But Kiwibank proved its real worth to New Zealand in the early stages of the global financial crisis. The Australian  banks withdrew substantially from the New Zealand mortgage Market. Kiwibank stepped  into the breach. Despite its very small size compared with the Aussies, it was for a year or two the largest provider of new mortgages…since Kiwibank was set up, the Australian banks have emphasised their New Zealand character…

The former Finance Minister then warned, and Minister Willis would do well to heed,  about the true character of the private banks:

…when the crunch comes , one should never be fooled  about where their primary accountability will lie.

In his 1988 speech to Parliament, opposing his own public asset selling Labour Party,  Jim Anderton also outlined the vision which in 2002 was to underpin both the  Kiwibank and  a newly minted  ministry of economic and regional development, of the public bank playing an essential role in national economic development:

…if it were decided to run an active regional development policy the geographical spread of the branches of the Bank of New Zealand makes the bank the only Government agency with the detailed knowledge required to act of the Government…of providing long -term development funds for viable projects in all the regions…sale of such an extensive economic power…may lead to the operation of the bank for purely financial commercial reasons…small borrowers , and even Governments, suffer when dominant banks  are run for short term financial reasons and profits.

All of these advantages are now at risk as the government , using the excuse of the need to raise capital for the bank to take on the Big 4, sets out to gift an essential economic tool to the private sector. The New Zealand Herald revealed the government’s intentions on 25 July:

In a routine letter of expectation sent to Kiwibank’s board chairman David McLean in April, shareholding ministers suggested they were open-minded as to how Kiwibank grew… ( Minister of State Owned Enterprises ) Goldsmith said the Government had no plans to privatise state assets, but conceded a possible outcome of the purpose statement exercise could  be that it decided it no longer wanted to own an asset.

Renationalisation Pledge

Warning bells should ring for Labour and the Greens. Labour members and voters triumphed over the initial opposition to Kiwibank of Helen Clark and Michael Cullen to Kiwibank. The Green Party has pledged to oppose asset sales. As Alliance MPs, Green Party founders Jeanette Fitzsimons and Rod Donald campaigned for Kiwibank . Labour and the Greens must form a united front in defence of Kiwibank.  A pledge to re-nationalise and expand through government financing ,there are multiple financing methods available , will deter the circling sharks which include the Australian bank competitors.

Governments of all stripes throughout the world recognise the crucial developmental role of a large state bank as an essential tool for long term investment and development. Labour and the Greens can unite to build on the vision of Jim Anderton and  ensure that New Zealand is not, once again, deprived of its state-owned bank by a short-sighted government acting in the narrow interests of the private sector and not in the best interests of New Zealand.

References:

• Building-a-new-public-banking-ecosystem
• BNZ Bill speech in the House
• LF Grant R 21.11.2022
• NZH 18 September 2024 Arena Williams MP

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01 AUGUST 2020 – Labour, as a party founded on the interests of all who labour for their living, should rule out before the election coalescing with New Zealand First (NZF). National has done that, for its own narrow interests, as NZF is not trusted by large sections of the public, and for good reasons.

But Labour should do now what it should have done in 2017- rule out this party which is a conduit for the most reactionary policies in New Zealand.

Labour has hypocritically used NZF in government for its disorderly retreat  on introducing genuine progressive tax measures  as a key tool to tackle the massive income inequality and  edging New Zealand closer and closer to the US military alliance aimed at its economic competitor China- a policy that predates Trump and was  enthusiastically backed by Obama- and oppressive policies on migration to name but a few of the retrograde steps under the coalition.

Labour continues to compete with NZF on which party will issue the least number of work visas.  It capitulated to NZF on the inhumane policy of denying spouses visitor visas to join their New Zealand partners.

No self- respecting socialist party, even if it takes the euphemistic name of centre -Left, should  govern with such a right-wing party if it is to maintain integrity.

Even a cursory review of NZF, its leader and its policies would have the any thoughtful Labour supporter come to that conclusion. The name of the party reveals its xenophobia.

“We are being dragged into the status of an Asian colony and it is time that New Zealanders were placed first in their own country,” said Winston Peters in 2005.

But there are hundreds of statements in this vein from Peters and other NZF MPs from the foundation of the party to the present.

And yet Jacinda Ardern in a Checkpoint interview with John Campbell just before the 2017 election could label Peters “progressive” and someone she could coalesce with. John Campbell was, quite rightly, staggered that she would mention the word ”progressive” and “Peters” in the same sentence.

Then Labour and NZF, pre-election, entered into an auction as to which party would grant the least number of work visas.

Labour issued its siren call to NZF to be its partner despite NZF’s anti migrant, anti-refugee (remember the vicious Peters’ campaign against Algerian MP Ahmed Zaoui even when he was exonerated?)  and anti-Muslim campaigns. Labour MPs fell over themselves to say what great friends they were with this bigot after election night 2017.

But given his mastery of hate speech and opposition to gun law reform no wonder Peters kept a low profile after the 2019 mosque massacre.

NZF’s low tax, social conservatism, pro US military alliance and law and order positions did not worry Labour MPs in 2017- it should have.

The cynical tactic shaped by Peters but borrowed from ”illustrious” demagogues of yore, of demonising the “other” and leading the gullible to believe that economic and social ills, whether unemployment, housing shortages or transport congestion will be solved with close to zero immigration and deportation of as many migrants as possible,  should be enough for  any self-respecting internationalist party to shun an electoral alliance with him.

But, unfortunately, Jacinda Ardern on the eve of this election is signalling that NZF is still a prospective coalition partner. In the NZ Herald of 01 August 2020, she is quoted as endorsing Peters: “Of course, I have a trusting relationship in order to work with the Deputy Prime Minister…”

The world awaits bold internationalist policies to tackle income equality, ecological disaster, racism, economic development post Covid and war.

NZF is not the suitable political partner for those tasks. No spoon is long enough to sup with that devil.

EDITOR’S NOTE: Hon Matt Robson currently specialises in immigration law, and is a former Minister in the Helen Clark Labour/Alliance Government 1999-2002. This is his first piece with EveningReport.nz.