Jones wants $100m bank levy
WELLINGTON: Regional Development Minister Shane Jones wants the banking sector to pay a levy of at least $100 million a year for their ‘‘extravagantly privileged position’’.
His comments follow a report by the Financial Markets Authority and the Reserve Bank, released on Monday, into the conduct and culture of 11 banks that operate in New Zealand.
While the report did not find the widespread systemic issues that plague Australia, it found that banks did not have good processes to manage poor staff conduct, and were slow to remove sales incentives that pushed staff to sell items such as personal loans and credit cards.
According to the Reserve Bank, ANZ, ASB, BNZ and Westpac made a combined $4.9 billion, after tax, in the year to December 31, 2017.
Despite that, Mr Jones said the banks were still cutting services to the provinces.
‘‘I have asked for them to go easy and maintain connectivity in the provinces and they say they can’t afford to.
‘‘That’s what I describe as the Aussie haka . . . You ask the Aussies to shout you a drink, and they say ‘I’ve got nothing in this pocket or that pocket’ and they throw their hands up.
‘‘Banking strategists in this country and overseas are conscious that New Zealand is one of the few developed countries that do not have a banking levy.
‘‘Aussie banks pay it in their own country, but they get a free go in our country. Make them pay for it.’’
Australia has introduced a bank levy of 0.06% on the liabilities of major banks, expected to raise about $A1.5 billion annually.
Mr Jones said a levy of $100 million a year for all of the banks in New Zealand should be a starting point.
‘‘The $5 billion profit reflects the extravagantly privileged position the banks occupy in New Zealand.
‘‘What should the size of the levy be? I’m hoping that’s part of [Consumer Affairs and Commerce Minister] Kris Faafoi’s work programme, but if he asks me, my opening bid is at least $100 million a year.’’
Banks have been given until next March to present a plan to effectively get rid of sales incentives and other shortcomings.
Mr Faafoi said if the banks fail to come up with adequate selfregulating processes, the Government will step in.
Mr Jones conceded there was ‘‘no clear evidence of villainy’’ from banks in New Zealand, but without the right processes for dealing with poor conduct, that possibility remained.
New Zealand First members voted for a remit in September for a $50 million levy from the banking sector to be used to keep banks in small towns. — NZME