The Government has confounded pundits by agreeing to provide
uncalled capital to New Zealand Post and Kiwibank, thereby
keeping them out of the hands of the private sector.
Finance Minister Bill English and State-Owned Enterprises
Minister Simon Power announced yesterday the Government had
agreed to provide $150 million of uncalled capital to Support
NZ Post's credit rating and assist in Kiwibank's continued
"We're confident this provision of uncalled capital, on
commercial terms, will give NZ Post and Kiwibank the
financial certainty they need to pursue their plans," Mr
Mr Power said the move sat alongside other Government
measures, such as allowing Kiwibank to retain profits and
requiring a lower dividend from NZ Post.
Immediately after the May Budget, Mr English was quoted as
saying he would support privatisation of Kiwibank. That was
later overruled by Prime Minister John Key.
Craigs Investment Partners broker Chris Timms said there
would be surprise in some circles that the Government had not
moved to privatise both NZ Post and Kiwibank.
"NZ Post was looking for equity and if the Government had not
stepped up the only other place it could have looked was the
private sector. They would have had to float, or partially
float, to get the equity it required.
"This goes completely against those who said the Government
will sell off state assets. And the best part is the
Government has done it without having to put its hand in its
pocket. It's just agreed to provide the support."
Maintaining a Standard & Poor's AA credit rating was
essential to Kiwibank being able to compete with the
Australian banks, Mr Timms said.
A drop in credit rating would mean funds would cost more to
borrow for the bank.