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Govt kicks off tenders for controversial banking contract


Crown contract currently held by Australian giant Westpac, which has dished out Rugby Sevens and rock concert tickets to ministers.

NZPA
Thu, 09 Jun 2011

The Government has started work on tendering its master banking contract, currently held by Australian giant, Westpac.

The Crown'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.

Finance Minister Bill English told Parliament's select committee on finance and expenditure that the new tender process was now under way, and being driven by the Ministry for Economic Development.

Green Party co-leader Russel Norman told the committee that last week Prime Minister John Key had said Treasury would make the decision on the winning tender, but this week had said MED would make a recommendation and ministers would make the decision.

Mr English said today the final decision would be made by Cabinet.

Dr Norman, who has argued that successive governments had run the contract as a "comfortable closed shop", said the Government's banking should be done by a New Zealand bank, Kiwibank.

He suggested that the close involvement of ministers in the tender eroded the Government's assurance that there was no problem over ministers accepting personal gifts from Westpac -- such as time in corporate boxes at big sports events -- while the Government was reviewing its banking.

Mr Key said earlier this month that there was nothing wrong with ministers accepting hospitality from Westpac, because it wouldn't have any bearing on the decision that would follow a competitive tender process.

And Mr English said today that the MED had specialist capability to carry out such tenders. "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," he told the committee.

There would be an unambiguous recommendation to ministers as to who should get the contract, which was worth about $4 million.

Dr Norman questioned whether Treasury officials -- who were allowed in their own department to take advantage of "modest corporate hospitality" -- had more freedom to take up such offers when they were seconded to work in the officers of government ministers, but was told that such gifts would still need to be declared in a register at Treasury.

He was told the register was not published publicly.

"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," Dr Norman said outside the committee room.

NZPA
Thu, 09 Jun 2011
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Govt kicks off tenders for controversial banking contract
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