FIRST Union supports the recommendations of today’s Commerce Commission report into the banking competition deficit, but is calling on Government to introduce an immediate windfall bank profits tax to support struggling communities and fund stronger public services.

"The Commerce Commission has described how the Big Four’s oligopoly structure generates windfall profits, and we support their call for "disruptive forces" to drive change," said Dennis Maga, FIRST Union General Secretary.

"Its recommendations - including improving the regulatory focus on competition, setting an open banking deadline, supporting the capitalisation of smaller banks and converting Kiwibank into a "disruptive competitor" - speak to a comprehensive strategy that merits careful consideration by the Government."

"Those recommendations, however, are largely focused on the medium-to-long term horizon. Our communities are struggling today, while RBNZ’s latest bank profit statements show that the banks in this country are still averaging a $10 billion pre-tax profit."

"This money is being stripped from of the productive economy, stripped from our public services and stripped from our household incomes. This profit extraction drives the austerity politics we are seeing unfold today."

"Until such a time that the government is able to foster a more competitive environment in the banking market, a windfall profit tax or banking levy makes sense and would bring us into line with trading parters like the UK and France."

"The Commerce Commission’s mandate does not cover workers’ remuneration, but we have observed a similar trend there. During the cost of living crisis, many of our members at the Big Four saw their wages fall behind the rate of inflation, let alone the rate of profitability."

"Increasing competition in the banking sector and fixing remuneration issues are part of the same challenge: designing a financial system that delivers the best outcome for our community. It’s clear we still have some way to go on that issue."

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