The government's proposals to make the banking system safer for customers might not be enough for New Zealanders struggling to save for their retirement, the opposition says.
From next year the government is proposing to put in place protections for New Zealanders' savings of between $30,000 and $50,000 if their bank fails.
Finance Minister Grant Robertson said setting it at this amount would mean 90 percent of people would have all their money in the bank covered.
"For most people what they're worried about in the unlikely event of a bank collapse is the ability to be able to keep paying the mortgage, keep paying the bills, this is set up so that people can do that," he said.
National Party Finance spokesperson Amy Adams said she was not convinced the cover would be enough for New Zealanders struggling to save for their retirement.
"You can have any number of scenarios, where perhaps a couple who have worked all their lives, have sold their business, they've got a little bit of money put aside, that's their retirement savings and it goes.
"We've been told we need to have somewhere between half a million and a million dollars in savings for your retirement and then we're told that only perhaps $30,000 of that would be covered, so I don't think that's enough," she said.
Watch: Finance Minister Grant Robertson speaking to Morning Report's Corin Dann:
Mr Roberston told Morning Report focus on setting the amount of savings protected had been ensuring the everyday New Zealand bank depositer would be covered.
"It does sit at the lower end of international comparatives, although when you look at countries with similar GDP per capita and similar concentration of banking services it's in the ball park.
"It's a balance between making sure we cover those everyday investors but also deal with the moral hazard argument - that don't want to cover all the risk for a scheme like this."
It was only one tool in a financial safety net, he said, along with the requirement for banks to have capital to cope with financial emergencies, the regulatory system, supervision and penalties.
How the scheme would be funded is still to be decided, although Mr Robertson said most countries did so with a bank levy.
"That's the part of the scheme we're designing, most of these schemes around the world rely on a bank levy, supported by government intervention as required.
"That bank levy is usually built up over time, over a number of years, hence why you need some sort of government backstop while it is being created," he said.
A backstop would require taxpayer funding, and Mr Robertson could not rule out banks passing on the cost of a levy to its customers, running the risk the public will be the ones hit in the pocket.
"We can't be certain about that obviously, but what we've seen from jurisdictions around the world is that these things find a way of washing through the system and you know competitive forces will come into play," he said.
Prime Minister Jacinda Ardern said the country could easily continue with the status quo, but the scheme better aligns New Zealand with countries like Australia, Canada, the US and the UK.
"New Zealand stands apart form the rest of the world in having no formal or permanent deposit protection, this means Kiwis with bank deposits have no protection of a financial institution from risks beyond their control.
The part of the review of the Reserve Bank Act comes as banks are under the spotlight, in particular ANZ, which is facing two investigations.
ANZ New Zealand chief executive David Hisco departed last week over describing personal expenses as business expenses - prompting calls for executives to be held to greater account.
Yesterday the government announced it plans to ensure the Reserve Bank has the ability to hold banks and their executives to account.
Mr Robertson today refused to express a view on deputy Prime Minister Winston Peters' call for Sir John Key to resign from the ANZ board, saying it was a matter for the bank's shareholders and Reserve Bank governor Adrian Orr.
Mr Peters said yesterday Sir John had a conflict of interest in serving as the chair of ANZ's New Zealand board and sitting on the bank's Australian board as well, and should resign.
"Mr Peters holds very strong view on this, he's entitled to hold them, but he also said it is the [Reserve Bank] governor's call," Mr Robertson told Morning Report.
"We have a good banking system in New Zealand but the behaviour in it does need to improve. We've got the mechanisms in place to make sure that happens."
Other proposed changes include a new governance board for the Reserve Bank and establishing the Treasury as the Reserve Bank's monitoring agent.
Tom Hartmann from the Commission For Financial Capability said New Zealand's reputation would get better as a result of introducing the guarantee scheme.
"The way we are seen internationally could definitely improve - particularly from organisations like the OECD and the IMF - because we have a government scheme like this in place," he said.
Mr Hartmann said it would also align New Zealand with other countries that have similar schemes in place.
Consumer New Zealand chief executive Sue Chetwin said it was a win for banking customers.
"Essentially everybody will benefit from that - it is great news for consumers - it means that banks will have to be responsible," she said.
Ms Chetwin said the government's plans reassured the public that their money was safe.
KPMG head of banking John Kensington said new banking protections such as the deposit guarantee scheme could bump up mortgage rates.