Winston Peters has launched an election-year policy that would see the New Zealand government buy the Bank of New Zealand back from its Australian owner and merge it with Kiwibank, creating what NZ First is calling the National Bank of New Zealand. The plan landed on Thursday and within hours coalition partner Chris Bishop, the Infrastructure and Housing Minister, was on television calling the idea fantasy land stuff and putting the price tag at five City Rail Links worth of capital spending.
Peters told reporters at the policy launch that returning a major trading bank to local ownership had been a long-running NZ First ambition and that the timing was right because New Zealand offered investors something rare. He said the country was one of those places more likely to attract investment because of the stability of its democracy, and that public ownership of a big-four bank would let profits stay onshore rather than being repatriated across the Tasman. Peters put the purchase cost at about 7.5 billion dollars.
National Australia Bank, which has owned BNZ since 1992, has previously told markets the subsidiary is not for sale. The merged entity would, on NZ First’s numbers, instantly become one of the largest banks in the country and the only one fully owned by New Zealanders. Kiwibank itself was set up under the first Labour-NZ First coalition in 2002, partly on the back of similar arguments about keeping profits in the country, and the BNZ buyback pitch is being framed by Peters as the logical next step in that project.
Bishop did not wait for the policy to settle before attacking it. Speaking to 1News, the National minister said the real cost would be far higher than the figure NZ First put on it, somewhere between 24 and 30 billion dollars once you accounted for what a forced sale of a profitable bank would actually fetch. That, he said, would amount to the next eight years of capital spending all in one go. To put it in pictures he added that it was basically five, or more, City Rail Links, on a bank.
His verdict on the proposal was blunt. Seriously, Bishop said, it’s fantasy land stuff. He argued that the government had higher priorities for any spare capital, including roads, hospitals, schools and electricity infrastructure, and that taking on a multi-billion dollar bank acquisition while running deficits would not survive contact with the Treasury.
The exchange is the latest in a string of public disagreements inside the coalition. Earlier in the week the Prime Minister’s office had to concede there were no emails to back Christopher Luxon’s claim that Peters had mischaracterised his position on Iran, and Bishop himself has been pushed onto the back foot over a Bill of Rights warning attached to his move-on orders bill targeting rough sleepers. The BNZ episode adds another quiet split to the list, this time over economic policy and the appropriate use of the Crown balance sheet.
Labour’s response was less about the dollars and more about the politics of the announcement. Tangi Utikere told reporters it was another reckon from Winston Peters and that he did not think the deputy prime minister was serious about the policy. He described the government as a coalition that’s a circus, and said voters were entitled to expect a more coherent approach to bank regulation and competition than the public arm-wrestle they were now watching.
The BNZ idea sits inside a wider NZ First package that also includes automatic KiwiSaver enrolment for newborns with a one-thousand-dollar government kickstart, designed to lift contribution rates and lock in long-term retirement savings from birth. That part of the policy has drawn less heat, partly because automatic enrolment proposals have been floated by both Labour and National in the past, and partly because the BNZ headline has soaked up the oxygen.
Whether any of this becomes government policy will depend on what voters decide at the general election on 7 November. National and ACT have so far indicated no interest in a bank buyback, and Labour leader Chris Hipkins has not endorsed it either, so the policy currently has one party behind it. The Reserve Bank, which sets capital requirements and approves changes in ownership of registered banks, would also have to be persuaded that a merged Kiwibank-BNZ would not concentrate risk on the Crown balance sheet in ways that breach prudential rules.
For now, the practical effect of Thursday’s announcement is political rather than financial. It has put bank ownership back on the agenda, reminded voters that NZ First and National disagree on substantial parts of economic policy, and given Bishop a chance to position National as the grown-up on capital spending discipline. It has also given Peters exactly what he wants in the run-up to the election, a fight with a coalition partner over a flag-and-country issue that NZ First voters tend to like.
You can read RNZ’s wider political coverage here and 1News’s report on Bishop’s response here.
The 2026 general election is on 7 November. If you are still working out where you sit on bank ownership, infrastructure spending and the rest of the campaign agenda, our voting tool matches your views against every party’s platform.
Would you back a Crown-owned BNZ merged with Kiwibank, or is Chris Bishop right that the money would be better spent elsewhere? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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