New Zealand First leader Winston Peters' plan to sell Kiwibank is "erratic and confusing" and would risk destroying the bank, Progressives leader Jim Anderton says.
Mr Peters yesterday put forward a radical proposal to float shares in Kiwibank, with their sale restricted to New Zealanders, and channel all the Government's $55 billion a year business through it.
But Mr Anderton said Mr Peters had recently signed the Progressive's pledge stating "my party will not initiate or support the sale of Kiwibank".
Mr Anderton, who pushed of the establishment of the government-owned bank, said Kiwibank was working well and didn't need to be tampered with.
"Why would you say you want to sell shares in the bank to New Zealanders when we already own it?
"Selling Kiwibank would destroy it as fast as some political parties' secret donors could get their hands on it."
He said a similar plan -- established when Mr Peters was Treasurer in the National-NZ First coalition in the 1990s -- to restrict share ownership to New Zealanders in the float of Auckland Airport had failed.
"It went offshore as fast as a wide-bodied jet."
He said Mr Peters was a "serial asset seller".
Greens co-leader Russel Norman also criticised the NZ First plan saying having a government-owned bank that raised all its capital locally had provided stability in the current global financial crisis.
"Privatising Kiwibank will inevitably lead to its overseas ownership like all the other big banks.
"This will see the bank's profits sent off to overseas owners in good times and in bad times New Zealand will be further exposed to financial crises which we might otherwise have been insulated from," he said.
"John Key and the overseas-owned banks must be rubbing their hands with glee at the opportunity to get their hands on `our bank'."
But Dr Norman agreed with Mr Peters' view the Government should direct more of its business towards Kiwibank.
Mr Peters said yesterday the plan was to combat the fact that New Zealand's big commercial banks were owned by Australian banks.
"Over $4 billion of profits disappears from our economy each year," he said in a speech to a public meeting in Tauranga.
"Adding to the profit is the fact that $55 billion worth of government business each year is transacted through an Australian bank."
Mr Peters said in troubled economic times Australian shareholders, not New Zealand depositors and borrowers, were priorities for those banks.
He wanted Kiwibank to be a stand-alone commercial bank.
It shares should be floated and owned by New Zealanders, who would be restricted from selling them to foreigners.
Mr Peters again raised his demand for a rewrite of the Reserve Bank Act, which he has said will be a bottom line issue in any post-election negotiations.