Party clings to bank plan

By RICHARD BRADDELL

WELLINGTON - The Alliance will continue to push for a "Kiwi Bank" based on New Zealand Post's network.

But it realises its aspirations will be tempered by the realities of being a junior partner in a coalition government.

Alliance leader and Deputy Prime Minister Jim Anderton said yesterday that a nationwide, New Zealand-owned bank remained Alliance policy, but he was conscious that Labour was more supportive of community-based credit unions as an alternative to foreign-owned banks.

In the past, NZ Post's response to the idea of re-entering a business it lost when the Post Office Savings Bank was sold to ANZ has fallen short of an outright dismissal.

Alliance members are thought to have informally discussed the idea with NZ Post. Alliance support for a locally owned bank stems from concerns about bank branch closures in isolated communities, fees it claims are significantly higher than those charged in Australia, the world's highest real interest rates and excessive profits.

Alliance spokesman John Pagani said that 90 per cent, or $1 billion, of the $1.1 billion in record profits made by the banks last year was repatriated to overseas owners, providing a drain on the balance of payments.

Had NZ Post been providing a competitive service, bank closures in sizable communities such as Alexandra would not have happened, said Mr Pagani.

Mr Anderton said the Alliance was a responsible, constructive coalition partner that would not pursue its objectives in a way that would "disrupt proceedings willy-nilly."