A bonus shares scheme for New Zealanders who invest in state-owned companies is likely to cost between $60 and $80 million, Prime Minister John Key says.

Labour yesterday suggested the loyalty scheme could cost as much as $1 billion if it applied to all five companies being partially sold off.

Key said the details of the scheme were yet to be finalised but the numbers being thrown about by the opposition were farcical.

The loyalty bonus would only apply to direct New Zealand retail investors.

They would likely have to retain the shares for at least three years.

If the entire float earned $5 billion and 20 per cent of investors were 'mum and dads' the total cost would be $60m based on an Australian model, he said.

"$60m for the entire programme. So it's $60m, not a billion,  three, or whatever ridiculous numbers are in the paper this morning all those numbers are wrong."

There were also benefits to having New Zealand investors in long-term ownership, Key said.

He said whether it was $60m or $80m it was worth it in the scheme of things.

"The Labour Party have spent the last 18 months telling us that foreigners are going to buy it and now were making it more attractive, arguably, for New Zealand investors to buy it and they don't like that either."

Finance Minister Bill English said the scheme would be finalised closer to the float of the shares.

"I think the numbers that are being used publicly by the opposition just don't make any sense at all."

It can't be costed until decisions about the scheme are made, he said.

"And it won't cost anything like that.

"Labour and the Greens are opposed to foreign ownership and now they seem to be opposed to New Zealanders buying these shares as well."

- © Fairfax NZ News