Removing a bid - can you remove a bid for any reason

Yes, you can do that no problem at all if you don't want to risk trading with them. Don't forget to add the member to your blacklist so they can not bid again. 

How do you retract a bid?

You can't retract a bid you have placed yourself Barrie, but you can ask the seller to do it for you and according to Trademe rules they are obliged to do so. If you have given them plenty of time and nothing happens, you can ask Trademe as well, but you would best do that via live chat as the normal ways will be too slow.

How low does a bidders feedback percentage have to be to entitle me as seller to remove their bid ?

I have had a bidder with a -1 feedback record should someone with a record like this be allowed to buy and sell on trademe?

They automatically get disabled when they get to -2, or they used to, but up to that stage, you can report them to Trademe if you see a pattern of problems, or, you can leave their bids and give them the chance to redeem themselves and improve. It really depends how many total trades they have done. If they have done 20 trades and are at -1, then it suggests a problem, but if they have only done 1 and that has lead to the -1, then it would pay to check out the feedback and see what it was for.