Kiwibank Fees Breaks Promise: Numbers Don't Add Up

Thursday 7 Feb 2002 Rodney Hide Press Releases -- Economy

ACT Finance Spokesman MP Rodney Hide said today that Kiwibank's overhyped fee structure failed to meet the political promise of undercutting the competition by thirty percent.

"Kiwibank's analysis shows annual transaction fees for a family of four to be $97.20. This compares with $114.90 for ANZ's Connect 10 account. The difference is only fifteen percent, or thirty-four cents a week. Jim Anderton and NZ Post have failed to deliver.

"Kiwibank is offering home loans at 6.1 percent. ANZ's Easy Start loans are 5.45 percent.

"Kiwibank's numbers don't stack up. The counter fees are 30 cents. But Kiwibank is offering to pay franchisees 53 cents plus GST. Fifty three cents is below cost for franchisees, which is why they are in revolt and baulking at signing up.

"The counter transaction fee means that Kiwibank and the franchisees lose money on every transaction. It's no wonder the roll-out is stymied.

"The fees announced today by Kiwibank are vastly different to the business case put to the Government to secure $80 million in taxpayer funding.

"Jim Anderton's concern was bank profits heading overseas. The problem now is that we have a bank with losses staying here.

"The leaked Cabinet Papers dated 16 October 2000 and 2 February 2001 had an annual fee of $105. Now there is none. Counter transactions were $1 each. Now they are 30 cents. Cheques were to be $2. Now they are 50 cents.

"The difference in the numbers is considerable. The numbers don't add up. No wonder the franchisees are baulking. No wonder Helen Clark is not opening an account.

"It's hard to see people switching banks for as little as 34 cents a week - especially since Kiwibank is also failing to deliver on the 300 branches with bank counters by May," Mr Hide said.

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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