Failed Roll Out Highlights Kiwibank Financial Flaws

Sunday 27 Jan 2002 Rodney Hide Press Releases -- Governance & Constitution

ACT Finance Spokesman MP Rodney Hide said today that NZ Post was now missing every target that had been set for Kiwibank's roll-out.

"Kiwibank does not financially add up and can't cover costs despite its $80 million subsidy. The 170 franchise holders vital to KiwiBank achieving NZ Post's business case are still baulking at being paid only 53 cents a transaction. This compares to $1.02 for the transactions they already do for the Taranaki Savings Bank.

"The failure to sign up franchisees has stymied KiwiBank's roll out. NZ Post promised Parliament that Kiwibank would be launched in February with 25 to 30 branches being opened each week through to May. Today, NZ Post has had to admit that February's launch will only be a pilot run, with the national launch not due until April (Sunday Star Times 27.01.2002).

"Last year, Jim Anderton promised that the Bank would be up and running by September-October 2001 (New Zealand Herald, 29.01.2001). NZ Post promised February 2002 (New Zealand Herald, 21.02.2001).

"Now the Hawkes Bay roll-out has had to be declared only a pilot because NZ Post has failed to secure agreement from the region's franchisees. This failure comes despite assurances given just before Christmas. NZ Post promised all franchises on 21 December 2001 that the final draft of their contract would be delivered early in the New Year. The draft contract has yet to be sent.

"The franchisees that I have spoken to today are incensed that Kiwibank spin doctor Bruce Thompson told the Sunday Star Times that their concerns were "misunderstandings" that "had been resolved". That simply isn't true. There is no misunderstanding about the fee NZ Post is promising, and nothing has been resolved.

"The failed promises and PR spin are par for the Bank. Jim Anderton opened his election campaign promising that Kiwibank "would not cost the taxpayer a cent" (New Zealand Herald, 03.02.1999). The Labour Government continued to rule out any money for the Bank (New Zealand Herald, 15.06.2000) but ended up putting $80 million of taxpayers' money into the Bank and has not ruled out spending more.

"Jim Anderton broke his promise and now taxpayers have sunk $80 million into a dog of a bank that can't even be sold to the very people expected to sell the bank to the public.

"I will be asking the Finance and Expenditure Select Committee that is meeting tomorrow to delay its report on NZ Post until the Committee has got to the bottom of NZ Post's promises and its treatment of its franchisees," 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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