The Green Party has announced a policy to strengthen Kiwibank so it can compete with foreign-owned banks, with a promise of better interest rates.
To improve interest rates the party said today it would:
1) Inject $100 million of capital into Kiwibank
2) Allow it to keep more of its profits
3) Passing on interest rate cuts.
Green party co-leader James Shaw says the Government is to blame for Kiwibank's limited ability to compete with foreign-owned banks.
"New Zealanders could be getting better interest rates no matter who they bank with, if Kiwibank was allowed to properly compete with the big four Australian banks," he says.
Mr Shaw says under the Greens' plan, a first-home buyer in Auckland with a $500,000 mortgage could save $690 per year.
He says across the economy, the mortgage savings alone would translate to saving of $312 million per year.
Four foreign-owned banks control 87 percent of New Zealand's banking industry, the Greens say.
"Our plan will help Kiwibank lead a change in New Zealand banking, by giving it a clear public purpose that requires it to drive competition to generate better interest rates for New Zealanders," says Mr Shaw.