John Armstrong: Lesson for Nats in way Kiwibank fuss kicked on

Photo / Richard Robinson

Why did it take John Key so long to finally get around to making a definitive statement that Kiwibank will not be sold while he is Prime Minister?

Key's assurance last Friday that the bank will remain 100 per cent Government-owned followed two weeks of increasing confusion about National's stance on asset sales, especially once the moratorium on such sales the party imposed on itself for electoral protection comes to an end on election day next year.

Kiwibank is a special case, however. It is subject to that moratorium - and will remain off the sale list once the moratorium is lifted.

Digging through the archives, Labour has found nine separate examples before the last election of Key ruling out one way or another National selling Kiwibank under his leadership.

Those assurances seem to have largely been forgotten in the wake of Bill English's musings about a partial privatisation. Key could have saved himself and the Government a lot of trouble by reminding everybody he had made the assurances. His explanation yesterday for his failing to do just that was somewhat unconvincing.

The Prime Minister insisted he had been consistent - that when questioned about a partial share float of Kiwibank after his Finance Minister had raised the possibility, he (Key) had replied in "generic terms".

In other words, he had been talking about the possible partial floats of some other state-owned enterprises, not Kiwibank. If he was doing that, it would have been useful to let everyone else in on the secret - rather than just himself.

A major factor, however, as to why Key may have delayed shutting down the matter was to avoid publicly slapping down English in the immediate aftermath of the Budget.

By holding back, the Prime Minister has avoided damaging "Key and English at odds" headlines.

Key was also no doubt punting on the fuss surrounding Kiwibank dissipating fairly quickly. That it did not forced Key finally to act last Friday - the eve of a long weekend hardly being the best time to get people's attention.

Over the next year, National has to write a new policy on asset sales for a possible second term. While Kiwibank is now off the list of possible sales, Key is not ruling out selling or partly floating other state-owned enterprises.

He would not be drawn on possible candidates for sale. He stressed that the Cabinet had not done any work on that policy yet.

Maybe not, but English's remarks have done a fair amount of the necessary political groundwork in terms of getting the public adjusted to the likelihood of a resumption of the long-stalled privatisation programme.

Putting Kiwibank off-limits to potential buyers gives National some flexibility because it makes it more difficult for opponents of privatisation to attack National for being motivated solely by ideological principles.

National can argue that not selling the bank shows it is now taking a far more practical and pragmatic approach to state asset sales.

Key, for his part, is deliberately trying to shift the public debate away from matters of ideology, for example by arguing his opposition to selling Kiwibank reflects whether the Government guarantee for deposits could still apply if 20 per cent-plus of the company was in private hands.

However, that the fuss over Kiwibank did not fizzle out within a day or two might well also tell National something about the voting public's appetite for the resurrection of a privatisation programme generally.