Global Biz

NZ's controversial govt banking tender underway

(Xinhua)
Updated: 2011-06-08 15:26

WELLINGTON - The New Zealand government has started work on tendering its controversial master banking contract, currently held by Australian-owned Westpac, Finance Minister Bill English said Wednesday.

The government's banking requirements were contracted to Westpac in 1989 under a master banking agreement -- covering all government departments -- but the Green Party complained late last year that the government had not run another tender process for the contract for 21 years, the New Zealand Press Association (NZPA) reported.

English told Parliament's select committee on finance and expenditure Wednesday that the new tender process was underway, and being driven by the Ministry for Economic Development (MED), but the final decision would be made by the Cabinet, said the NZPA report.

Green Party co-leader Russel Norman, who has argued for the banking services to be put out to tender, told the committee the government's banking should be done by a New Zealand bank, Kiwibank.

Norman suggested that ministers who have accepted personal gifts from Westpac -- such as time in corporate boxes at big sports events -- created a conflict of interest, but Prime Minister John Key has denied this, saying hospitality from Westpac would have no bearing on the decision.

English said Wednesday, "In this case, we're not going to decide who succeeds, because there should be a set of transparent criteria clear beforehand, and then clarity about who meets those criteria after a tender."

There would be an unambiguous recommendation to ministers as to who should get the contract, which was worth about 4 million NZ dollars ($3.27 million), said English.

"Given that senior ministers will be making the final decision on the master banking contract, it's important that they and their staff are not seen to be compromising their impartiality by accepting generous corporate hospitality from Westpac," Norman said outside the committee room.