Levy for banks earning more than $500m needed - bank workers' union

By Gyles Beckford RNZ

The union representing bank workers wants a levy on excess profits in the sector as well as a broader inquiry.

First Union researcher and policy analyst Edward Miller said the latest banking report by KPMG showing annual sector profits of $7.18 billion, most of it for Australian owned banks, showed how well banks were doing.

He disputed whether banking profits were low when compared with many large New Zealand companies, saying their performance over the past decade has been more than favourable.

"While the big four banks' 2022 return on equity figures clearly trumped those of their Australian parents, our analysis of World Bank data shows New Zealand banks have some of the highest return on equity figures in the developed world."

Miller said a government inquiry into bank profits was necessary, but a more direct approach was also needed.

"We would like to see an additional 5 percent levy imposed on the profits of any bank that earns more than $500 million in annual profits to fund the establishment and operation of a Ministry of Green Works."

"In 2022, a levy like this would have delivered more than $300m in revenue."

He said such a ministry would build crucial public infrastructure, addressing long-term housing and infrastructure deficits, including mitigating the impact of extreme weather.

"This will help stabilise the New Zealand economy and deliver more balanced growth."

The government blocked a National Party attempt to get a select committee hearing into banking profits but has intimated the Commerce Commission might be asked to do a market study, similar to those done on the grocery, fuel retail, and building products sectors.