18 February 2001.

Prime Minister
Executive Wing
Parliament Buildings
WELLINGTON

Dear Prime Minister,

Cabinet meets tomorrow and will consider the proposal for the "people's bank." To date, the Government has not been prepared to provide basic information concerning the proposed setting up of the "people's bank".

As no decision has yet been made by the Cabinet to even approve the setting up of the bank, it may be that the Cabinet has not been given the appropriate information on the true risks and nature of the proposal. Certainly Members of Parliament who will be asked to approve an appropriation of about $80 million for the bank have not received sufficient information to make a fully informed decision.

I am acting in the public interest by releasing information which has come to the Opposition which asserts that:

1. the independent appraisal of the "people's bank" proposal by Cameron & Co did not categorically certify the economic viability of the proposal.

2. in the expert opinion of Cameron & Co that of several scenarios considered for the "people's bank" the most likely scenario was negative.

3. the proposal for the "people's bank" explicitly seeks to avoid attracting large numbers of low income New Zealanders

4. should too many low income New Zealanders be attracted to the "people's bank" that fees would be hiked

All members of Cabinet and Members of Parliament must be given the full facts about the people's bank proposal before significant sums of public money are put at risk. I ask you to carefully consider this proposal before making a final commitment because it is in the public's interest that the right decision is made and for the soundest possible reasons. I would have thought you would not have wanted the position to be otherwise.

Material on the business case for the "people's bank" arrived unsolicited in my office on Wednesday 13 February 2001. As you will be aware, Members of Parliament are being asked to give their support to this proposal, so there was a clear duty in the public's interest to make this information known.

When I released information on Thursday afternoon I made it absolutely clear that under no circumstances would I release information that would undermine New Zealand Post's interests as a State Owned Enterprise. I have not done so.

I received a letter from Jim Anderton on Friday 16 February requesting that I either shred or return the documents. Having made the political point about the gap between what Mr Anderton has asserted about the "people's bank" and what the business case says, I have shredded the material since I have now achieved my purpose.

Yours sincerely

Rt Hon Jenny Shipley
Leader of the Opposition

cc

Deputy Prime Minister
Minister of Finance
Minister for SOEs

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