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Jim's Bank a very risky business

Jenny Shipley Leader of the Opposition

15 February 2001

Jim's Bank a very risky business

"For the past three weeks I have called on this Government to let the public know what sort of risks the 'Peoples Bank' proposal poses. They have refused to do so, despite the $80 million of taxpayer money needed to set up the bank, and the untold millions savers would put at risk if they switched to this bank. The only explanation can be that the Government knows it has something to hide," Opposition Leader Jenny Shipley said today.

"Because of the Government's refusal to allow the public and Parliament to be fully informed, I have today released a risk assessment from the highly confidential business plan for the Peoples Bank, prepared by New Zealand Post. It shows there are many high risk areas which, it acknowledges, will be difficult to manage.

"Is it any wonder Mr Anderton and Dr Cullen tried to keep this sort of information, as well as highly critical Treasury advice and the Cameron Report, under wraps?

"Helen Clark should not accommodate this foolish idea just to keep her Government in power. A Government genuinely committed to 'modernisation and economic transformation' would not be putting taxpayers cash at risk on such a banking venture.

"The public has a right to know what sort of risks the Government is about to commit to with this poorly thought out banking venture. The public also has a right to know that the Peoples Bank isn't nearly as committed to low fees, or to low-income people, as Mr Anderton has portrayed it as being. Indeed, the evidence shows that the opposite is true.

"Savers are also entitled to know that the business case for the bank depends on a very large number of customers moving to the bank for 'philosophical reasons'. What Jim hasn't made clear is that if his sums, which are based on a large number of 'assumptions', don't add up and the bank fails those philosophical disciples will lose their savings.

"The Greens and New Zealand First should demand to know the whole story before they decide whether to vote for this electoral sop to Jim Anderton.

"I believe it is irresponsible and devious for the Government to hide information which indicates that Jim's Bank would pose major risks to taxpayers and savers alike. The public has a right to know whether their money is being used wisely, or simply being used to appease the ego of Mr Anderton," Mrs Shipley said.

Ends

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