NICOLA WILLIS DOESN'T KNOW HOW BANKS WORK

 

Squeaky Willis embarrassed herself yesterday when trying to explain the new bank levy that was announced in the 2026 budget.

Finance Minister Nicola Willis announced a new prudential levy on major banks, insurers, and non-bank deposit takers to fund sector regulation. Expected to raise $209 million over four years, the levy is framed as a fair measure to align New Zealand with international practices in Australia, the UK, and Canada. 

Key Points of the Levy
Purpose: The funds raised will go to the Reserve Bank to cover the costs of services, supervision, and regulation of the financial sector.
Scope: It applies to banks, insurers, and other financial market participants, recovering roughly $50 million per year.
Scale: Willis noted this is a "modest" levy that accounts for less than 1% of the total profits of the big four banks alone.

          - Google AI Overview 

She thinks that the banks and other institutions will readily cough up this money and reduce their profits rather than pass on the increases - plus an  extra percentage because that's how it works - to consumers. Basically it's an extra tax that they will see as costs and mark-up on top of this. Willis cannot see this and her understanding is like Donald Trump's naive awareness of how tariffs work and who actually pays the tax.

ACT Leader David Seymour and others oppose the levy, arguing that a bank levy is an indirect tax on consumers and that customers will pay the extra cost of without question. This is one of the few things that I agree with David Seymour on.

I'm sure we all agree that the banks and other overseas owned institutions are making obscene profits and that there needs to be some measures put in to fairly distribute the wealth or at least to limit how much money is being taken offshore but, imposing another levy, tax or tariff isn't the way to go. The consumers/customers will end up paying more through fees, charges and interest and the governments take will be diluted through administration costs and general wastage.

So there!