Banks should spend tax handout in New Zealand

Last year the four major Australian banks operating in New Zealand made the following after tax profits:

  • ANZ National – $1,072 million
  • Westpac – $639 million
  • BNZ – $605 million
  • ASB – $440 million
  • Total – $2,756 million

So, a cut in the business tax rate in this year’s budget from 33 cents to 30 cents in the dollar could add up to an estimated $124 million based on last year’s profit results to the combined profits of the four major Australian-owned banks that operate in New Zealand.

Of course, we need to palce a caveat beside this estimate, because among other reasons not all the bank’s paid 33% corporate tax. For instance ASB paid 30.6% on their before tax profit.

So the question is, what should Australian banks do with that tax handout the New Zealand government is giving them?

Finsec is arguing that this money should be invested in the banks’ New Zealand businesses, workers and customers rather than sent off-shore to overseas shareholders. The business tax handout should not be applied to large foreign-owned companies like banks. The only group that will benefit from this move are overseas shareholders, at the expense of New Zealand tax payers.


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