PM Edition: Top 10 Business Articles on LiveNews.co.nz for May 19, 2026 – Full Text

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Source: Radio New Zealand

New Zealand First might want the government to buy back BNZ and meld it with Kiwibank to create a banking competitor to take on the Australian big banks – but there’s limited evidence that it would work.

NZ First leader Winston Peters said at the weekend that the decision to sell the bank in the 1990s was a disgrace.

The bank encountered problems in the 1980s when it expanded into corporate lending after market deregulation.

The Crown coughed up not once ($634 million) but twice ($720m, with the help of another investor) to save it, before it was eventually sold to National Australia Bank, which still owns it.

Speaking at a campaign event at the Trusts Arena in West Auckland, Peters said the new entity – to be known as “National Bank of New Zealand” – would be commercially run and designed to compete more aggressively with the major Australian-owned banks operating in New Zealand.

He estimated buying the bank would cost “$7.5 billion upwards”.

Government-owned Kiwibank has struggled to have an impact in the sector and has been described as a “one-armed boxer” hampered by a lack of capital.

University of Auckland emeritus professor Tim Hazledine said improving banking competition was a worthwhile goal but reducing the number of major brands was unlikely to achieve it.

“Rather than buying back the Bank of New Zealand and merging it with Kiwibank, the government should use its ownership of Kiwibank to position it as a ‘fighting brand’ and reduce interest rate margins,” he said.

“That could put pressure on the big four Australian-owned banks to follow suit.”

Sam Stubbs, founder of Simplicity, said purchasing BNZ would require a willing seller.

“There isn’t one there. That means the price is likely to be high which will limit the ability of the bank to offer cheaper mortgages and higher term deposits. Even if it did work and demand grew, the government of the day would need to spend more taxpayer money to expand, we need that money spent on hospitals.”

He said he could understand a desire to go back to the “good old days” of state-owned banks.

“But I suspect a better and much cheaper for the taxpayer way to achieve the same thing is for Kiwibank to be renamed the National Bank of NZ and listed with only NZ shareholders and let KiwiSaver funds provide the billions required to make it a serious, publicly owned bank.

“Public ownership does not have to mean government ownership. If only New Zealand investors can own shares a listed Kiwibank would be publicly owned, we would be selling the family silver to the family.”

Other sectors in which the government has a strong ownership stake include power – where it owns 51 percent of three of the country’s four major electricity gentailers – and airlines, where it owns 51 percent of Air New Zealand, have their own challenges.

The government bought back KiwiRail in July 2008.

University of Auckland senior finance lecturer Gertjan Verdickt said there was “ample” evidence that NZ First’s plan was not a good idea.

“I have an entire paper on the railway industry in the 1930s: we show that governments are more likely to give money to politically connected railways, not those in economic need.

“Interestingly enough, it doesn’t change profitability, you see employment growth down, but wages of current employees go up. In other words, it doesn’t help the railway, it helps employees, especially the c suite. Also, the chances of those railways going bankrupt actually goes up. So, all in all, bad idea.”

He said there had also been an international study looking at how government ownership and involvement in a banking system affected performance between 1989 and 2004.

“They uncover an interesting pattern of changing performance differences between state-owned and privately-owned banks around the Asian financial crisis. They find that state-owned banks operated less profitably, held less core capital, and had greater credit risk than privately-owned banks prior to 2001. Again – troubles in paradise.”

He said there was some evidence that consumers would benefit if a Government bought a bank. After a bailout, there were lower loan spreads, longer maturities for loans and less collateral held.

“Overall lending goes up but if you see which type of lending, it is politically driven. This to me doesn’t outweigh the risks.”

Kōura founder Rupert Carlyon said in the energy market, the companies had underinvested in generation to keep prices high.

“It is also telling that the government couldn’t put money into KiwiBank and then the private sector were unwilling to, due to its low profitability.

“Let’s figure out where the problems lie and then we can go from there. In my mind, really good regulation is needed and solves the problems.”

He said it would help to have good regulation requiring banks to minimise costs for customers, such as with an annual review of customers’ accounts to ensure they were set up efficiently, and an annual fee letter setting out what fees, interest payments and other relevant sources of revenue applied so customers could compare what they were paying to what they would be charged at other banks.

“Around small business lending and risk appetite, I am not sure there is a huge amount that can be done here – this is the one place where increased competition would be very helpful but we need to let banks set their own risk appetite. SME banking is the issue here. But the government owning BNZ and telling them to relax their credit criteria is not the answer either. Maybe the answer is that we need to instruct KiwiBank to focus primarily on SME banking and give up on corporate and retail banking.”

Kernel founder Dean Anderson also said there was no evidence.

“I think the commentary on government intervention and forced acquisitions raises serious concerns for investors and global relations. Maybe too much time in the Trump sphere.”

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Source: Radio New Zealand

The finance minister is set to reveal proposals to reduce the number of government agencies, by telling ministries and departments to come up with plans for amalgamation.

RNZ understands Nicola Willis will set out three proposals on Tuesday afternoon to create efficiencies in the public service, including amalgamating government agencies, more work on digitisation and using AI, and setting a target to reduce the public service headcount to 1 percent of the total population by 2029.

Willis will reveal further details in a pre-Budget speech to Business North Harbour.

On Monday evening, she told Newstalk ZB’s Heather du Plessis-Allan the government would be taking the approach of asking the public service to come back with options on “logical” mergers.

Asked whether some departments would be cut altogether, Willis said there were two ways of coming at the same problem, pointing to the new Ministry for Cities, Environment, Regions, and Transport, which will replace the Ministry for the Environment, Ministry of Housing and Urban Development, Ministry of Transport, and the local government functions of the Department of Internal Affairs.

“So, in effect, some of those entities don’t exist anymore, but what you’ve got is one joined up agency that delivers all of the decent things those agencies were delivering in a much more coherent way,” Willis said.

“So we want to do more of that approach of saying, ‘well, what actually would make more sense to come together under one umbrella and one agency, and would actually lead to a better service to the customers it’s trying to serve, and would be more efficient?’”

Last year, the Public Service Commissioner Sir Brian Roche told Mata he was looking at a shakeup of agencies.

At the time, he said all options were on the table, but indicated ministries’ functions and branding would remain.

Willis told Newstalk ZB she would release figures on reducing the headcount during her speech, but said she accepted New Zealand would continue to have a growing population, and growing demands for the delivery of public services.

“We’ll continue to incarcerate people in our prisons, deliver welfare support to families, so those things will continue, but absolutely we can do more of that using digital tools, being more efficient. We don’t need as many departments to do it. We’ve got some awesome public servants. They’re smart cookies, but ultimately we tie them in bureaucracy a lot at the moment.”

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Source: Radio New Zealand

New Zealand First’s plan to buy back the Bank of New Zealand is an “outlandish proposal”, says an economist.

NZ First leader Winston Peters on Sunday announced a policy to automatically enrol all newborn citizens into KiwiSaver with a $1000 government contribution, alongside a proposal to buy back the Bank of New Zealand and merge it with Kiwibank to create a new state-owned bank.

Speaking at a campaign event at the Trusts Arena in West Auckland, Peters said the new entity – to be known as “National Bank of New Zealand” – would be commercially run and designed to compete more aggressively with the major Australian-owned banks operating in New Zealand.

Infometrics principal economist Brad Olsen said it “headline-grabbing” rather than “serious policy”.

He argued there were little details as to how the policies would be carried out, which made it difficult to understand what effects they might have.

He said it was was encouraging to see more political discussion around KiwiSaver, but he worried that continually changing the scheme would keep people from being able to plan ahead because of ever-changing rules.

He questioned where the party might find the funds for these policies.

“There’s talk around the likes of sovereign bonds and similar. That’s still debt that the government would effectively have to backstop and take on board. It would require a number of Kiwis to front up with a whole bunch of cash to buy a new bank when you still haven’t seen all that much interest in recent times around putting more money into Kiwibank.”

Olsen said there was not much money for the government to spend on such purchases, given necessary expenditure on such things as health, education and defence.

Massey Business School Professor Claire Matthews not only worried about finding the money for buying back BNZ, but also about what message it was sending to international companies.

“If he’s saying ‘we will buy it back’, he’s basically saying that National Australia Bank have got no choice. They will require them to sell it to them. That’s nationalisation. That’s a major thing for a government to do.”

She questioned why a single bank had been targeted if the goal was simply to make Kiwibank more competitive through a merger.

“So if it’s really just about fostering competition and fostering the New Zealand banking sector, then I don’t think you would be targeting a particular bank. You would simply be saying ‘we would like to discuss it and see if we can reach an agreement’, which is quite a different message.”

As for KiwiSaver, Matthews said making contributions compulsory was “one of the least important elements”. She said she would prefer an overhaul of the system rather than isolated changes.

But Rupert Carlyon, the managing director of KiwiSaver provider Kōura Wealth, disagreed that the system needed to be transformed.

He argued that the main issue was a lack of incentives for people to contribute. Even with mandatory contributions, “the economically rational person would not be contributing to KiwiSaver,” he said.

He pointed to Australia where money going into superannuation is taxed at a reduced rate and at the UK where contributions are tax-free as possible models.

Similarly, Carlyon did not understand how nationalising BNZ would solve issues in the banking sector – such as lowering interest and fees or increasing lending to small businesses.

“I mean, it just doesn’t make any sense to me. We own the electricity companies and we still can’t get them to deliver for consumers and for everyday New Zealanders. If we own one of the banks, how’s that going to be any different?”

He advocated for regulation instead.

Financial writer Martin Hawes said making KiwiSaver compulsory was much needed, and the earlier someone joined, the better.

“I think it was Oscar Wilde who said youth is wasted on the young, and that’s nowhere more true than in investment.

“Investment works with compound interest, and what you really need with compound interest is lots of time.”

He attributed high uptake of KiwSaver to the $1000 kickstart payment, which ceased more than a decade ago.

He said introducing the saving scheme early and bringing back a kickstart would incentivise the next generation to contribute.

Associate Professor of Finance at Victoria University, Martien Lubberink, said having two major banks merge and be government-owned was not optimal for attracting investment.

“That sort of politicking creates tremendous uncertainty among investors because they’ll be subject to regulatory risk. If there’s a new government, there will be a new policy for the bank.

“What you want is a long-term vision for the combined bank to survive, but if politics start interfering every few years, there’s too much uncertainty to make it work.

“There’s not really a problem with BNZ or Kiwibank, they’re making profits, they’re growing a bit, probably the best thing is to leave it alone.”

Concerns about funding the policies were echoed by the Labour Party.

“It was Labour who created Kiwibank and KiwiSaver. We welcome any serious conversations about improving both for New Zealanders but Winston Peters’ plan lacks details, such as how they plan to pay for it,” Labour’s finance spokesperson Barbara Edmonds said.

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Source: Radio New Zealand

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Source: Radio New Zealand

A recent headline in The Australian newspaper declared: Budget increases New Zealand’s appeal as a tax haven.

It said, with no capital gains tax, no stamp duty or land tax, and the opportunity to negatively gear, business owners and property investors in Australia were looking across the Tasman with “genuine envy”.

But how do the tax systems compare? Are New Zealanders getting a better deal? And is that actually a good thing?

Australia’s latest government Budget has prompted some strong reactions.

Capital gains taxes have been increased. Where previously investors could have a 50 percent discount if they owned an asset for at least a year, that is being replaced by a discount based on inflation, and a minimum 30 percent tax on capital gains – except for people who are on a pension or other income support, or investing in new build housing.

Assets bought before 1985 that previously were not captured for capital gains tax purposes are also now included.

Landlords also will not be able to reduce their tax by deducting rental property losses from income earned elsewhere, except for new builds.

New Zealand does not have capital gains tax, apart from the bright-line test that applies to residential investment property bought and sold within two years.

Rental property losses are already ringfenced in the investor’s residential property portfolio and cannot be offset against other sources of income.

Simplicity chief economist Shamubeel Eaqub said Australia had long had more stringent taxes on a wider range of things, including capital gains tax and stamp duty.

He said the Australian capital gains tax changes were significant, but unlikely to drive people across the Tasman.

He said what mattered to businesses was whether they could make a profit, then how much of it they could keep.

“The first part hasn’t really changed, the main reason why people start up a business is because they want to make a successful business and the chances of creating a successful business are much higher in Australia than in New Zealand.”

People had to make a taxable gain to pay capital gains tax on it. “It’s not tax on value but tax on gain, so you have to make a profit to pay tax on it.”

Australia had broader, more diverse range of taxes, he said, while New Zealand focused more on personal income tax and GST. Australia has a tax-free bracket for lower incomes.

Australian companies paid more in corporate income tax, and the Australian government also collected more per capita in payroll tax, stamp duty, royalties, land tax and insurance taxes.

New Zealanders, on the other hand, paid more in GST, gambling taxes, motor vehicle taxes, rates and customs taxes.

New Zealand’s government spends more as a proportion of gross domestic product, which Eaqub said was due to the country being better off overall.

“I’m not saying it’s a great system, they have their issues like we do but there are big changes taking place… they’ve ripped off the bandaid.”

Kelly Eckhold, chief economist at Westpac, said it was not controversial that New Zealand had a more generous tax treatment for property investment.

“New Zealand does actually have relatively advantageous rules with respect to that.”

Infometrics chief forecaster Gareth Kiernan said it would make sense for Australian investors to eye New Zealand.

“Especially given that Australians aren’t restricted under foreign buyer rules, and the sizable shift in the exchange rate over the last year that makes our property appear that much cheaper.”

Deloitte tax expert Robyn Walker said New Zealand was “definitely not” a tax haven.

“That said, in the aftermath of the Australian Budget there has definitely been a bit of a cheeky ‘tax marketing’ narrative around the tax system being better in New Zealand. I think objectively, the New Zealand tax system is better than Australia. We have a simpler approach to a lot of taxes, whereas Australia is very complex and has a number of additional federal and state taxes which we don’t have to deal with in New Zealand. Our lack of a wholesale capital gains tax is a major point of difference.

“Without having looked at the detail of their negative gearing rules, conceptually they seem similar to our rules from 2019, albeit they have a new build exemption and we have the ability to opt out of the rules if the disposal of the property will be subject to tax.”

Cotality chief property economist Kelvin Davidson said it was still possible that New Zealand could move more in Australia’s direction.

“It does feel like we are shifting towards tighter property taxes over the medium term… perhaps we are more lenient on the capital gains side of things and Australia is more lenient on the cash flow side.”

He said he polled investors at a recent event and found that they would rather have a capital gains tax and the ability to fully claim interest costs as a business expenses, rather than avoid a capital gains tax but lose interest deductibility.

“I’m not surprised by that because what it tells you is that it’s about cash flow… if you can’t service a loan, you can’t keep your property and the capital gains tax is sort of irrelevant because you’re not going to get the capital gain in the first place.”

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Source: Radio New Zealand

The government has introduced legislation that would clarify the purpose of Disability Support Services (DSS), including making it clear the Crown is not the employer of family carers.

The legislation would reduce the Crown’s exposure to fiscal and litigation risks, following a Supreme Court decision which ruled in favour of family carers last year.

In December, the Supreme Court ruled two parents who cared full-time for their disabled children were employees of the government, and should receive the same benefits and protections.

Disability issues minister Louise Upston said while the new legislation would not affect those two successful claims, she believed there were “better ways to recognise and support carers than treating family members as state employees”.

Upston said she had commissioned further work in that space, and would be consulting on a package for carers.

“This Bill clarifies that DSS funding is a contribution toward disabled people being able to live an everyday life. It makes clear that families and whānau have responsibility for the wellbeing of their members in the first instance and where appropriate,” she said.

“This reflects the way that DSS already works. It doesn’t mean that DSS won’t help where disabled people’s families support them.”

The Disability Support Services Bill, introduced on Monday evening, said it was never the policy intent for the Crown to be the employer of carers, and it would reaffirm that it was the Crown that made funding decisions.

“This provides certainty regarding the relationship between disabled people and paid family carers following the Supreme Court case. If a disabled person uses DSS-funded disability support services to employ another person, the employment relationship is solely between the disabled person and the carer,” it said.

Upston said Disability Support Services had been operating without a clear legislative function, which had made it harder for people to understand what support was available, who qualified, and how decisions were made.

“This Bill establishes foundations and sets a clear framework for how DSS operates. It sets out what the disability support system does, its purpose and how public funding can be used,” she said.

There would be no changes to current supports for disable people, whānau, and carers.

There would also be no changes to current funding allocations, or who could get disability support services.

The legislation stated it was intended to “strengthen and stabilise” the provision of DSS, by improving the consistency, transparency, and sustainability of the system, and it would clarify that “responsibility for care of disabled people rests in the first instance with their family and whānau, where appropriate.”

A Regulatory Impact Statement (RIS) from the Ministry of Social Development said in the absence of a legislative framework, policy settings were increasingly being made through court judgments.

“If the DSS Bill is not introduced, then MSD will have to manage fiscal costs through operational policy changes, for example, restricting eligibility, access to Flexible Funding, and/or level of DSS provided for disabled people and family carers,” officials said.

“The Government has a priority of fiscal responsibility, and any increases in appropriated funding would ordinarily be prioritised to address cost pressures. Increasing payment to family carers to meet historic claims and/or ongoing wage costs will not result in an increased level of care and support for disabled people compared with the status quo.”

The RIS noted there had been no community of prior agency consultation on the specific legislative proposals, given the urgency and confidential nature of the options.

The bill is set to have its first reading on Thursday, and will go to a Select Committee for public feedback.

Writing on her Substack, lawyer and disability advocate Dr Huhana Hickey said the minister’s statement “that families and whānau have responsibility for the wellbeing of their members in the first instance” was concerning.

“It reinforces a long-standing assumption that families will step in where government support falls short. Officials often soften this language by referring to ‘natural supports,’ as though unpaid care simply happens without cost,” she said.

“But there is nothing natural about a parent leaving paid employment to provide full-time care. There is nothing natural about elderly spouses physically lifting partners without proper support. There is nothing natural about siblings restructuring their own futures because the State has stepped back. That is not natural support, that is policy design and increasingly, it feels like policy design built around withdrawal.”

Hickey said rather than the government using the Supreme Court’s decision as an opportunity to better recognise carers, it was moving quickly “to ensure broader obligations do not flow from that ruling”.

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Source: Eastern Institute of Technology

3 minutes ago

Leaving behind an established international aviation career to move to New Zealand and study at EIT has paid off for Vinodh Dharmarajah, who will graduate as one of two valedictorians this week.

The 38-year-old will graduate with a Master of Digital Business from EIT Auckland and deliver a valedictory address at one of two graduation ceremonies at Aotea Square tomorrow (Tuesday, May 19).

“It’s an extremely surreal moment, to be very honest,” Vinodh says.

“I wasn’t expecting at all that I would reach something like this. For me, the goal was always to complete the course to my own satisfaction and give my best. Being named valedictorian feels like an added privilege”

Originally from Sri Lanka, Vinodh moved to New Zealand with his wife to complete the 18-month Masters programme.

He brought extensive international experience to his studies, having worked with Qatar Airways, Emirates Holidays, Sri Lankan Airlines and British Airways, alongside senior management roles overseeing multiple airline operations.

Vinodh says returning to full-time study later in life was not something he had originally planned.

“A few years back, I wasn’t planning to become a full-time student,” he says.

“When I came here, I already had around 15 years of work experience and other qualifications. I didn’t want to repeat something I already knew. I wanted to be challenged and continue learning.”

He says EIT exceeded his expectations, challenging students academically, while also providing strong support.

“The lecturers challenged us, but they also provided enough knowledge and support. There was always room to learn and grow.”
While studying, Vinodh secured an internship with Williams Property Services Group, where his performance led to a part-time role before later becoming a full-time position.

He now works as Strategy and Business Development Manager.

Vinodh says one of the most rewarding parts of his EIT experience was studying alongside students from around the world and hearing the stories behind their journeys to New Zealand.

“Some students came here without knowing anyone and had to adapt to a completely different culture and environment. Leaving your comfort zone and starting over in another country takes courage.”

He says those experiences helped shape the speech he plans to deliver at graduation.

“I want to acknowledge how far many students have come. Every student has their own journey and challenges, and that really inspired me during my time at EIT.”

Vinodh also credits his wife for supporting him throughout his studies while he focused on completing the master’s programme.

“She was extremely supportive and worked while I was studying.”

Looking back, Vinodh says studying in New Zealand helped prepare him for both the local workforce and life in a new country.

“I’m not the same person who enrolled in the course. Professionally and personally, I’ve changed a lot through the journey.”

EIT Auckland Campus Director Cherie Freeman said: “Vinodh’s courageous leap into a new chapter and his commitment to growth have not only exceeded his own expectations but truly inspired our entire EIT community. We are incredibly proud to celebrate his remarkable achievements.”

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