The Government’s paid $2.1 billion to buy Kiwibank. 

For all intents and purposes, this doesn’t really change much. Kiwis own Kiwibank now but Kiwis owned Kiwibank before.

We just own it in a different way. Now it’s through the Government directly. Beforehand it was through ACC, the Super Fund and NZ Post which owned it. 

But what this has doesn’t is stopped the possibility of selling part of Kiwibank offshore. The Super Fund – one of the previous owners — wanted to bring in big cash from foreign investors. Grant Robertson wouldn’t allow it, so the Super Fund sold its share to the Government.

That’s why Kiwibank’s crowing today about being 100 percent Kiwi-owned. Because of the chance that it might not have been. At least not 100 percent. 

Opportunity missed. I think Kiwibank could actually benefit from having some foreign investors buying into it. 

Set aside your feelings about having a Kiwi-owned bank. The bank doesn’t really work at the moment. It’s just not that good, is it? 

Have a look at Kiwibank’s Facebook post about this announcement and see all the grumpiness from customers. Complaints about Kiwibank not having Apple Pay yet. Complaints about regular technical faults cutting customers off from their money. Complaints about the trouble getting customer service staff on the phone.

It’s been around 20 years and yet it’s still a minnow. It’s not big enough to compete with the big Aussie banks. Its balance sheet is 6 times smaller than ANZ’s, 4 times smaller than BNZ and ASB’s, and 3 times smaller than Westpac's. But it is big enough to give those big Aussie banks the pretence of competition. 

The problem is the bank doesn’t have enough cash right now to be competitive which is why it needs foreign investors: to bring in the cash. The Government’s probably not going to give it enough money.  

If that was a political option, it would’ve happened sometime in the last 20 years.

We don’t have to sell all of it. It could be similar to Air New Zealand and the power companies. The Government owns 51 percent or more and retains control and sells some of it to bring in the big dollars and grow it. Surely owning 51 percent of something that’s actually good is better than owning 100 percent of something that’s not really working, isn’t it?