Banks profiting, people suffering: How NZ’s banks fuel the cost of living crisis

Chris Lynch
Chris Lynch
Sep 26, 2023 |

Photo: Square Space

A campaign to highlight record profits being made by banks has been launched.

‘Stop Bankflation’ by FIRST Union and ActionStation aims to highlight record bank profits that have not ‘trickled down’ to workers and customers.

They say New Zealand’s four major banks have increased their profits by 80 percent in the last decade.

Over that period, average annual profit increases have been running at triple the rate of average annual wage increases, negotiated in bank worker collective agreements.

NZ banks’ net interest margins (the difference between lending and borrowing rates) are now at their highest level in 17 years. This means mortgagors, businesses and consumers endure relatively high borrowing rates, while depositors receive relatively low deposit rates.

Dennis Maga, FIRST Union General Secretary said “while the ‘Big Four’ have been making record profits, bank workers’ wages have stagnated and increasing interest rates have exacerbated the cost of living crisis.

“Excessive bank profits offer no discernible benefit to anyone except the Big Four’s shareholders, whose dividends are extracted overseas while everyone here is made worse off.

Ace Sieed, a FIRST Union delegate and Westpac worker, said he believed peoples’ savings were evaporating during a cost of living crisis, and that some colleagues at Westpac were having to cancel subscriptions and gym memberships or move back in with parents to survive on wages that have not kept pace with growing bank profitability or a rising cost of living.

“People currently can’t afford to save or enjoy the standard of living that you’d expect from a busy week of full-time work and are doing whatever they can to stay afloat,” said Mr Sieed.

“People’s savings are running out faster than their patience to weather this storm.”

“While political parties quibble over government spending, the Big Four banks are quietly raking in mega profits off the backs of their own staff and customers.

“They appear to be benefitting from our primary policy response to quell inflation, sustaining the cost of living crisis.

Chris Lynch
Chris Lynch

Chris Lynch is a journalist, videographer and content producer, broadcasting from his independent news and production company in Christchurch, New Zealand. If you have a news tip or are interested in video content, email [email protected]

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