The prospect of better competition in the banking sector by boosting Kiwibank capital, is getting the thumbs up from one economist

Cabinet's given Kiwibank's parent company the green light to fundraise 500-million dollars from New Zealand investors, in a bid to compete with the big four Aussie banks.

Finance Minister Nicola Willis says it could help facilitate an additional 10-billion dollars in home loan lending.

Bagrie Economics Managing Director Cameron Bagrie says more competition is a win for consumers.

He says this move has the potential to turn the dial a little, and while it's not a game changer, it will help.