Coalition negotiates to safeguard bank project

By VERNON SMALL deputy political editor

Finance Minister Michael Cullen is inviting the Greens to abstain rather than scupper the planned New Zealand Post-run Kiwi Bank.

Senior Coalition advisers will begin briefing Green and New Zealand First MPs today as they carefully build support for the bank - a key plank of Alliance policy.

On Monday, the cabinet approved the bank in principle but one of the smaller parties must back it, or at least abstain, because Labour and the Alliance command only 59 votes in the 120-seat House.

The crucial vote will be on a bill which would give the Government the right to raise the $40 million to about $75 million capital injection needed to kick-start the bank.

Such "money bills" are automatically treated as confidence votes.

But Prime Minister Helen Clark said yesterday that it would not be sensible to pressure the Greens, who normally support the Government on confidence votes, if they did not favour the bank. The Greens favour a community-owned bank, but may not block a new locally owned bank.

Their concerns include the new bank's impact on credit unions and on the TSB in Taranaki, the security of NZ Post staff, and the bank's ultimate viability.

New Zealand First leader Winston Peters said his party was in favour of the idea of a NZ Post-run bank, which could provide competition, keep bank charges honest and retain profits in this country.

But his party would need a few weeks to consider the proposal.

Meanwhile, Helen Clark said securing the necessary votes in the House was just one of the conditions the cabinet had set down before it gave the final nod.

Others are thought to include an exit option, which would see the business or its customer base sold to defray the set-up costs.