June 26 (Bloomberg) -- New Zealand’s Inland Revenue Department will keep most of its banking with Westpac Banking Corp. for the next eight years rather than join other government departments in offering the business to new bidders.
New Zealand’s government is putting the contract for supplying banking services to all departments and state agencies up for tender for the first time in 25 years, allowing rivals a chance to snare the lucrative contract from Westpac. The government is expected to request proposals from bidders before the end of the month.
IRD is undergoing a business transformation and this creates complexity “around transitioning the government’s revenue-related banking services,” the Ministry of Business, Innovation and Employment said on its website. “It is proposed that IRD will stay with Westpac for the 8-year duration of the transactional banking services contract in relation to crown banking and over-the-counter payments,” the ministry said.
IRD collects about NZ$49 billion ($43 billion) of core government revenue, distributes family payments and helps administer the student loan and worker savings programs. Its own departmental banking will be part of the tender.
The government will seek tenders to provide transactional banking, Crown cash management, collection of inward payments, card services and foreign-exchange transactions, according to the website. It expects to close the tender at the end of October.
The government plans to award the contract to one supplier for transactional banking, and establish panel arrangements for other categories, according to the website.
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