Armstrong's tip brings Bolger the job

By PAULA OLIVER

New Zealand Post chairman Ross Armstrong put forward former National prime minister Jim Bolger as his successor and as head of the proposed People's Bank.

Mr Bolger will take over the reins of the taxpayer-funded bank in the midst of strong National Party opposition to the project.

He is also to become chairman of New Zealand Post, when Dr Armstrong steps down in the middle of next year.

Mr Bolger's appointment was a political bombshell.

A beaming Mr Bolger said in Wellington yesterday that he would lead the bank from Washington until his post as Ambassador to the United States ended in January.

Clearly enjoying his return to the spotlight, Mr Bolger said he had thought long and hard before taking up the job offer, which had first come from Dr Armstrong in June.

"Obviously I'm supporting it (the bank) by becoming chair. That's a self-evident statement."

Asked if he saw any irony in his new job, since he presided over the Government's sale of the Bank of New Zealand in the 1990s, Mr Bolger said: "I'm sure lots of people will see irony. I reflected long and hard.

"I'm familiar with some of the debate that's gone on in New Zealand, but I think there's a service I can contribute to both organisations."

Mr Bolger's appointment is being interpreted by many as a smart attempt to douse the political flames burning around NZ Post and the People's Bank.

A series of media leaks have wiped some of the shine from the project, the pet of Deputy Prime Minister Jim Anderton, over the past month.

Well-documented allegations of boardroom squabbles at NZ Post are also expected to be cooled when Mr Bolger takes over as chairman of the state-owned enterprise.

Prime Minister Helen Clark yesterday said Mr Bolger was an excellent appointment.

She did not see his lack of a banking background as a problem.

National leader Jenny Shipley, who ousted Mr Bolger as prime minister, said it was better to see him appointed than "some left-wing flunky".

"When I was a young minister in his cabinet I watched him skilfully preside over assessing the BNZ, which the Labour Party had left in a complete shambles for National to inherit," she said.

"We not only sorted out the debt of that bank, but we proceeded to sell it, and those skills may well be useful in the future."

Mr Bolger emphatically denied reporters' suggestions that his move was motivated by a need to avenge Mrs Shipley's leadership coup.

Act leader Richard Prebble attacked Mr Bolger's appointment, labelling it a sign of the Government's desperation.

But Mr Anderton was philosophical about seeing his adversary take over.

He admitted there had been an "intake of breath" among some of his colleagues when the cabinet was told, but said that Mr Bolger brought good leadership, and people- and team-building skills to the job.

The People's Bank is expected to open its doors in February.

Primed with $80 million of taxpayers' money, it will need 100,000 customers to become commercially successful.

The full board for the bank will be announced in a week. Dr Armstrong said it would include at least three experienced bankers.

NZ Post is also close to deciding a name for the bank.

Doug McLaren, chief executive of the Credit Unions Association, reacted to the appointment of Mr Bolger by saying: "I guess it always was called Jim's Bank, wasn't it?

"I don't have a problem with his appointment - I think it's a little amusing, but I guess they're choosing a man who is right for the wrong."