Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
Cosgrove Clayton: Questions for Oral Answer — Questions to Ministers 
[Volume:616;Page:11910] 
4.  
CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Finance 
: What reports has he received on the success of Kiwibank? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Kiwibank has met or beaten all its financial and performance targets since it opened for business in February 2002. It can now boast 290 outlets and more than 200000 customers. 
Clayton Cosgrove 
: What risks if any are there to Kiwibank’s future? 
Hon Dr MICHAEL CULLEN 
: Not indeed competition because Kiwibank faces enormous competition from very much larger-funded Australian-owned banks. The greatest risk would be a change of Government given comments on  
Holmes  
last night that indicate that Dr Brash would definitely want to sell Kiwibank. 
John Key 
: If Kiwibank is so successful why does it need to be propped up with revenue from New Zealand Post’s red ticket arm and bill-paying services to the tune of $35 million a year and does he agree that redirecting this revenue from one arm of New Zealand Post to another is just a snow job to hide much larger losses? 
Hon Dr MICHAEL CULLEN 
: No not at all. Indeed Kiwibank is clearly on target for making a profit next year as its business plan indicated. One of the reasons—[ 
Interruption 
] The chairman is a former National Party Prime Minister who having made the same mistakes as Dr Brash and sold a New Zealand-owned bank has since seen the error of his ways and chairs Kiwibank. 
Rt Hon Winston Peters 
: Can the Minister of Finance advise the House and the country as to whether he knows of any OECD nation where in the last 7 years the trading banks have made the same size of profits as the banks operating in New Zealand and is that his idea of competition—as espoused by Dr Brash on television last night? 
Hon Dr MICHAEL CULLEN 
: The member is correct that foreign-owned New Zealand banks have made exceptionally large profits in recent years. One of the achievements of Kiwibank has been to lead to quite a reduction in the fees being charged by those overseas banks which means that from the Government’s perspective Kiwibank has succeeded in its first objective. 
John Key 
: Why would the Minister think that a bank with total assets of well under 1 percent of the total assets held in the New Zealand banking system would have any material impact at all on the provision of banking services for New Zealanders and why does he not just admit that the people most happy with New Zealand Kiwibank are the other banks in the New Zealand system which have managed to give that bank the poorest most unprofitable worst accounts? 
Hon Dr MICHAEL CULLEN 
: That was certainly a very revealing question. New Zealanders who do not have large wealth and large incomes—according to the National Party’s deputy finance spokesperson—are people not worth having in one’s business. 
Mr SPEAKER 
: For some reason there seems to be a little bit too much noise at this moment. 
Dr Don Brash 
: I raise a point of order Mr Speaker. The Minister in no sense even attempted to answer the question Mr Key asked. There was no reference to the question at all in his answer. 
Mr SPEAKER 
: I thought the Minister did address the question. 
Rt Hon Winston Peters 
: In respect of the Minister’s first answer is it his view that when a spokesperson on finance talks about competition in banking the clear inference is that it is of benefit to the consumer not just to shareholders who may extract massive profits from New Zealand; and would that explain why the “great debater” has not asked a question in the House today? 
Mr SPEAKER 
: The first question only can be answered. 
Hon Dr MICHAEL CULLEN 
: I think the member is correct to suggest that the purpose of competition is to drive down costs not simply to exist for its own sake. Of course discretion is always the better part of valour. 
Hon Trevor Mallard 
: I seek leave for an additional supplementary question to be granted to the National Party today on the basis that the Leader of the Opposition the finance spokesperson use it forthwith. 
Mr SPEAKER 
: If the member knew the Standing Orders he would know that he cannot do that. [ 
Interruption 
] The member will stand withdraw and apologise. I have made a ruling. 
Hon Trevor Mallard 
: I withdraw and apologise. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I realise that one cannot seek leave on behalf of another member but with the House being the master of its own destiny I think that it is quite possible for someone to seek an opening for one further question to be asked. I so seek leave now. 
Mr SPEAKER 
: To be asked by the member himself? 
Rt Hon Winston Peters 
: No by anyone—hopefully the “great debater”. 
Mr SPEAKER 
: The member can seek leave for that. 
Hon Richard Prebble 
: I seek leave for Mr Peters to ask a further question. I know that he sought leave to go on the  
Holmes 
 show and was ignored and I know that Helen Clark very wisely did not turn up. The reason they are really upset is because Don Brash actually cleaned them up last night. 
Mr SPEAKER 
: This is an interesting question and I have been given accurate advice. Leave can be sought for an additional question but then anyone can compete for it. I have to make the judgment. Is there any objection? There is not. One additional question can therefore be asked on this topic today. [ 
Interruption 
] I call the Rt Hon Winston Peters. 
Rt Hon Winston Peters 
: I want to hear from “Fearless”. Come on! 
Mr SPEAKER 
: I have called the Rt Hon Winston Peters. He is entitled to ask a question if he wishes. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. Of course we will let him ask it but I heard Mr Peters say he wanted the House to hear from “Fearless”. Is he referring to himself? That would be far too humorous a description of himself. 
Mr SPEAKER 
: The member’s attempts at wit are often only half successful. 
Rt Hon Winston Peters 
: Has the Minister done a comparison of some of the trading banks’ profit rates at the time when the economy was growing at 1 percent—when National was in charge—and the banks were making between 26 and 32 percent per annum even without the marginal growth rate; and what sort of economic commentator would advocate that as being competition? 
Hon Dr MICHAEL CULLEN 
: The member makes a very fair point. It is quite clear that to some extent competition existed more in terms of the number of banks than customers receiving a good deal from the services those banks provided. He also makes a fair point about the size of those profits. The Inland Revenue Department has been discussing with the banks the fact that their tax papers do not seem to reflect the amount of profit they have been making. 
Mr SPEAKER 
: I am about to send somebody out. 
Dr Don Brash 
: Can I ask the Minister why if this— 
Hon Richard Prebble 
: I raise a point of order Mr Speaker. I apologise to the member but I think I should raise this as a point of order now. We just heard the Minister of Finance give out confidential Inland Revenue Department information. To say that the department is investigating anybody appears to me to be a very serious matter for the member to be mentioning. Maybe I misheard him but I would like him to clarify that because it would appear to me to be a major breach of the security provisions of the Inland Revenue Department and a misuse of the privileges of this House—if that is what I understood the member to be doing. 
Hon Dr MICHAEL CULLEN 
: I am certainly debarred from giving taxpayer-specific information. That was not specific to any bank. It was about the banks in general. 
Mr SPEAKER 
: All I can say is that that is not a matter on which I can rule. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I specifically asked for one further question to be opened on this issue and to leave it open and I sought leave. Having given Don Brash the chance to balance— [ 
Interruption 
] No no members should listen and they will learn. You have closed off question time for this question. [ 
Interruption 
] Oh yes he had and  
Hansard 
 will demonstrate it. I then sought leave for one extra question. Not just me—Mr Prebble did first. I sought it specifically in a way that could be granted and it was granted. That question has been answered and we should pass on to the next question and not give “Deputy Don” the chance to rise now. 
Mr SPEAKER 
: No. I just want to say that the member should read the Standing Orders. The extra question was granted. The House can give leave. That is the 61st question and it does not count in the sums. Any member from any party in the House that has not used up its quota can still have supplementary questions to No 4. 
Dr Don Brash 
: Why if Kiwibank has been so successful over the last 2 or 3 years does it still make up a banking system no bigger than Taranaki Savings Bank? 
Hon Dr MICHAEL CULLEN 
: Kiwibank started from scratch with a capital of $83 million. Although that sounded huge to members opposite when it was being proposed it is tiny for setting up a bank. It has captured well over 200000 New Zealand customers in the space of 2 years. 
John Key 
: Given the enormous interest in Kiwibank from Mr Mallard and other members and given our desire to ask questions on this side of the House I seek leave for another question on Kiwibank. 
Mr SPEAKER 
: The member does not need leave. He can ask a question. [ 
Interruption 
] All right. The member has sought leave for an additional question. This is a 62nd question. Is there any objection? There is but the member is perfectly entitled to have a supplementary question. 
John Key 
: If he is so keen on competition and believes in the success of competition from Kiwibank why has he asked to redirect into Kiwibank $35 million worth of original revenue that was never in the bank’s business plan to prop up what is otherwise a failing institution? 
Hon Dr MICHAEL CULLEN 
: It is certainly not a failing institution. It is in effect outperforming on forecast in terms of profitability. The synergies that Kiwibank achieves in terms of the internal business of New Zealand Post is one of the reasons why it has been able to offer reduced fees. For Mr Key reduced fees for people on low incomes with modest cheque accounts may not seem important but they are very important for ordinary New Zealanders—the people that party opposite is not interested in in terms of banking. 
John Key 
: I raise a point of order Mr Speaker. I know the Minister wants to rant and rave about his position but I would just ask you— 
Mr SPEAKER 
: What is the point of order? 
John Key 
: I asked him a very specific question. The amount of $35 million has been redirected from New Zealand Post into Kiwibank. It was not in the original business plan and I asked the Minister to tell the House why he allowed that redirection to take place if Kiwibank is such a successful organisation. I would like an answer to the question if I may. 
Mr SPEAKER 
: The member did put in a comment about failing banks and the Minister certainly addressed that part of the question. I heard him.