I cannot think of any way in which this is groundbreaking. As you will know, Kiwibank is already state owned, and uses the network of post offices. Like most banks, it also offers a full range of financial services.
A groundbreaking "people's bank", offering a full range of financial services and using the UK network of 12,000 post offices, is being promoted by Peter Mandelson, the business secretary.
It's also, to the unitiated, quite a weird idea. The popular arguments for Kiwibank are (in decreasing order of popularity):
1) It introduced competition and thus drove down rates.
2) It stops profit going offshore to the Australian-owned banks that otherwise ply their trade in New Zealand. The popular image is one of the banks 'siphoning' money out of our economy.
3) It provides a bank that looks after Kiwis and has our natural interest at heart.
Taking them in a completely different order to which I listed them:
3) This is ridiculous, of course. The Government mandate of any SOE is to maximise profit. This is the only way for it to be feasible in any way. That said, obviously Kiwibank has an image to maintain. But so does any firm that hopes to sell goods in New Zealand.
1) This is true, it did. But any marginal benefit to the consumer has to be weighed up against the massive opportunity cost of all the capital required to start something like this. Kiwibank may come out in the positives in this respect, I don't know. But the cost is something frequently ignored by people like, say, the Labour Party. When it comes down to it, would you prefer a little bit off your mortgage or millions of dollars more funding for schools, healthcare or education? We do have to make these tradeoffs, and is it deceptive to pretend they don't exist.
2) Consider first that these banks employ thousands of New Zealanders. Huge proportions of any money they make goes directly into the pockets of New Zealanders. Secondly, Australia has massive amounts of trade with us. It's ridiculous to suggest that the money is somehow gone forever. Thirdly, it's more than a little racist to suggest that people don't deserve to profit off giving you a service because of where they happen to live. In my mind, this is at the root of a paradox unique to certain elements of the left - they propose that our business should only be restricted to those who are from the same country as us, but then have the audacity to claim anti-racism as a cause for their 'side'. Please.
Here is an IMF working paper on bank privatisation. I like this quote.
The paper finds that countries with higher levels of state-bank ownership tend to have lower levels of per capita income, underdeveloped financial systems, interventionist and inefficient governments, and poor protection of property rights.Obviously the causal relationship is the other way around. But still, heh.