National would revisit local private investment in Kiwibank
National would open state-owned Kiwibank to local private capital if it is re-elected.
Finance spokesperson Nicola Willis confirmed the position on 1 October 2026, describing the idea as a "win-win solution", according to RNZ. She said National is "very keen" to work with Kiwibank to raise more capital so it can keep growing faster than the Australian-owned banks and challenge the major banks.
The proposal would let domestic investors hold a stake while the bank stays in New Zealand hands. Willis said safeguards, such as provisions in Kiwibank's constitution, would be needed to guarantee it remains in New Zealand ownership.
Last year the government authorised Kiwibank to engage with local investors, including KiwiSaver providers and Māori institutions, about investing in the bank. The government said at the time that an extra $500 million of capital could support up to $4 billion of business lending or $10 billion of home lending.
That engagement did not lead to a deal. Kiwi Group Capital, Kiwibank's parent company, later scrapped the capital-raising plan, saying changes to Reserve Bank capital requirements gave it access to another $400 million in capital.
Willis said some local institutions raised concerns about getting a fair price on exit when Kiwi Group Capital spoke to them. Fund managers have a legal duty to act for their members, so the terms of sale matter to them and to any future process.
The four Australian-owned banks together hold about 85 percent of bank lending in New Zealand, compared with just over 6 percent for Kiwibank.
Labour opposed the private-investment idea as partial privatisation. New Zealand First leader Winston Peters said he would not entertain a partial sale of Kiwibank.
Willis said National would have more to say about the proposal.
The broader context here is that the policy sits at the overlap of banking competition, tight government budgets and coalition management. Capital, the money a bank holds to absorb losses, sets how much it can lend while meeting Reserve Bank safety rules. Like fuel in a truck, it limits how far the bank can go. The money can come from taxpayers or from local private investors, and that choice decides who carries the risk and who gets any return.
In my view, two questions will decide whether it can work. The first is whether officials can design a stake that gives KiwiSaver providers confidence on entry price, dividend payments and exit. Willis has acknowledged exit pricing was an issue last time, and without a clear way to sell, the same investors may hesitate again. The second is whether constitutional protections for New Zealand ownership can be drafted tightly enough to last under MMP, where a future Parliament could change them by law. Labour's framing and Peters' opposition show where the next election debate will sit.
