ASB bank freeze staff wages – no union members to stop it

ASB has announced a wage freeze for all staff on $50,000.

Finsec President Kelvin Pycroft said the ceiling for the wage freeze was far too low, and the ASB should have followed their parent company the Commonwealth Bank of Australia, and frozen wages above $100,000 only.

“The main difference between the bank’s Australian and New Zealand staff is that in Australia they are union members while the ASB is un-unionised. Hence they get lumped with a far worse wage freeze than their Australian colleagues, and can’t do anything about it.”

“ASB has targeted middle income earners who can ill afford this freeze – and their employer announced an after tax profit of $238 million for the first six months of their financial year.”

Pycroft said that with inflation at 3 percent the wage freeze was in fact a 3 percent pay cut. “The financial crisis should not be used as justification to cut or freeze pay when banks continue to make large profits despite the current conditions.”

Finsec is calling on the other banks not to follow ASB’s lead by freezing wages when they can afford reasonable wage increases for staff.

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.