Banks cry foul over levy
The banking industry says it is being unfairly targeted by new levies to cover the cost of the financial regulator.
Under plans announced by Commerce Minister Craig Foss yesterday, banks and other deposit takers with more than $50 billion of assets on their balance sheet will pay $350,000 a year towards the cost of the Financial Markets Authority (FMA).
The New Zealand Bankers' Association today said that while it had no issue with industry contributing to the costs of the regulator, the way the costs were assigned did not sit well with the principle that levies be proportional to benefits received.
''Banks are well-regulated responsible lenders operating at the top end of the market,'' chief executive Kirk Hope said.
''The levies should better reflect the costs and benefits where they actually fall.
''The FMA has an important job to do to crack down on the irresponsible end of the market.
The benefits to already responsible participants are not at all evident compared to the costs they are being asked to shoulder,'' Hope said.
While banks could pose a greater structural risk to the economy, Hope said the prudential risks of the sector were already being managed by the Reserve Bank.
''At a structural level we're talking about well regulated entities paying for the regulation of poorly run, failed finance companies.''
The association had lobbied for a flat fee being placed on all companies and trusts of $40 a year.
Small businesses have not escaped the increases entirely, with the cost of maintaining a company increased by $45 a year. This includes the reintroduction of a $25 annual return fee, as well as two $10 fees to cover the costs of the FMA and the External Reporting Board (XRB).
Massey University's School of Management head Claire Massey said only around 40 per cent of New Zealand businesses were registered as companies, and tended to do so when it was advantageous from a tax perspective.
''The businesses that are going to be affected by this are the ones who are doing okay.''
BusinessNZ economist Stephen Summers said the introduction of fees through the Companies Office to help resource the FMA and XRB ''made practical sense given the need for improving confidence in capital markets and financial service providers''.
According to Foss the levies will raise $16.4 million for the FMA and $3.66m for the XRB.