“Time to hit the banks and international speculators with a Financial Transaction Tax”, say Bad Banks campaigners.

Bad Banks media release
24 December 2009

“It’s great news that the Aussie-owned banks have to pay up their unpaid tax,” says Vaughan Gunson, Bad Banks campaign manager. “It’s a defeat for them.” [See NZ Herald article Banks to pay taxman billions]

“It shows that big corporations can be brought into line. While the IRD had the law on its side, we shouldn’t underestimate the role mass public opinion has played in getting the banks to cough up,” says Gunson.

Bad Banks campaigners have been on the streets over the last few months handing out leaflets with information on the banks and the world economic crisis. “We’ve found there’s a real bad mood against the banks,” says Gunson.

“People know the Aussie banks have been making exorbitant profits over the last decade by charging high interest rates for mortgages and credit cards, high fees, and through mega-scale tax avoidance,” says Gunson.

People have been telling us, “Yes, the banks are bad”, “They’re ripping us off big time”, “The banks want to turn us all into debt slaves”.

“And there’s a high level of awareness that it’s the global banking cartels who are responsible for the world economic crisis which is causing large-scale job losses in New Zealand, along with widespread clamps on wages and salaries,” says Gunson.

“The banks and other corporates are trying to make ordinary working people bear the cost of the crisis. We need to resist,” says Gunson.

“To make the big banks and financial speculators pay we’re campaigning for the introduction of a Financial Transaction Tax. A small percentage tax on every financial transaction would net hundreds of millions from banks and international speculators who shift billions and billions of dollars around every year,” says Gunson.

“A tax that targets the mega-rich would allow us to shift the tax burden off low and middle income earners,” says Gunson. “We could take GST off food, which would be a big help to grassroots New Zealanders struggling to pay the bills.”

“Just because the banks have been forced to pay their unpaid tax bill, doesn’t mean they should be let of the hook,” says Gunson. “To protect our people we urgently need major reform of the banking industry.”

To contribute to the national debate that we must have in New Zealand about the banking system, Bad Banks offers these suggestions for transforming the power relationship between banks and the people:

1. Immediate government intervention to stop banks chucking "mum and dad" homeowners out of their homes because of a job loss or income cut.

2. The establishment of a government regulatory body to oversee the renegotiation of mortgages based on realistic market values and the ability of the homeowner to pay.

3. Turn Kiwibank into a proper "public service" bank offering first-home buyers a 3% interest state loan.

4. Zero-fee banking offered to people on modest incomes. Facilitated by expanding the role of Kiwibank and forced regulation of all banks operating in New Zealand .

5. Introduction of a Financial Transaction Tax (FTT) that would net the banks and other financial speculators. A decisive step in shifting the tax burden off low and middle income people and onto the mega-rich.

6. All bank loans to big business over a fixed amount to be approved by a government regulatory body that acts to protect the environment and communities. Such a measure is essential to preventing powerful global banking interests from sabotaging the necessary emergency mobilisation against climate change.

7. A full public inquiry which looks at every aspect of banking operations in New Zealand , with public meetings held throughout the country, so that grassroots people can tell their stories.

For more comment, contact:

Vaughan Gunson
Bad Banks campaign manager
(09)433 8897
021-0415 082
svpl@xtra.co.nz


See also the media release from CAFCA, IRD Delivers Best Possible Xmas Present To Long Suffering Kiwi Taxpayers.

ANZ's intricate tax dodging continues

In an article that appeared in the Sunday Star Times, ANZ in intricate deal on eve of court battle (13 Dec), reporter Rob Stock details how ANZ (but not just not them) used shonky loan deals with foreign banks labelled "money go rounds" to avoid tax.

Rob Stock gives examples of one particular money go round set up within New Zealand:

The BNP Paribas transaction is not the only curious-looking structure on ANZ National Bank's books. There are several related-party loan deals that have a similar appearance to tax dodging money-go-rounds.

Cortland Finance, for example, was owed $437m by ANZ National Bank at the end of September 2008, though it is a wholly owned subsidiary of Arawata Finance, which is 100% owned by ANZ National Bank. In other words, ANZ had put capital into the company and then borrowed it back again.

Similarly, ANZ National Bank owes more than $2b to its wholly owned subsidiaries Tui Finance and Tui Endeavour, money that represents capital put in by the bank. Also at the end of September 2008, Arawata Finance was owed $717m by ANZ National Bank, but it owed the bank $533m.

Follow my lead: ditch that tax-dodging bank

by Finlay MacDonald
from Sunday Star Times
18 October 2009

IT'S EARLY for New Year's resolutions, I know, but here's a suggestion in advance: fire your Australian-owned bank. If you need a reason, look no further than the recent billion-dollar judgement against Westpac for tax avoidance. That came on the back of a similar judgement against the BNZ for half a billion. Tell your Aussie bank you're mad as hell and you're not going to take this any more!

Continue

Aussie tax dodging robber banks make bank robbers look like amateurs

by Murray Horton
from CAFCA

The Australian-owned banks have been congratulating themselves on what a good recession they’ve been having and how it was all down to their prudence in not getting involved in any exotic financial transactions. Quite right, there’s nothing exotic about good old fashioned tax dodging, even if it was done via deliberately complicated structured financial transactions. So that’s how they rode out the recession, by not paying nuisance costs such as taxes. Not an option for the rest of us mugs, though.

So far the courts have ruled that two of the Aussie banks (BNZ and Westpac) avoided taxes totaling more than $1.5 billion. The IRD’s cases pending against the ANZ and National Bank, if successful, could push that well over $2 billion. This is theft from the NZ taxpayer on a truly monumental scale, particularly at a time when the Government is cutting back public spending. This huge shortfall in tax could be used for health and education.

NZ taxpayers are the guarantors of the deposits of these banks. Yet we get no say in their running, let alone ownership. Massive tax dodging can be added to the list of recidivist corporate crimes committed by these robber banks who make bank robbers look like rank amateurs. How come we never hear from the Sensible Sentencing Trust about locking up these criminals and throwing away the keys? Where are the judges who sermonise about beneficiaries stealing from the taxpayer?

The taxpayer needs to be directly represented on the boards of each one of these Aussie banks that we’re underwriting with our money. And, if that doesn’t do the trick, nationalise them.

And why is the Government still using Westpac as its bank? As Bill English would say, “it’s not a good look”. Too right, Bill, and you’d know all about that. How about only using a bank that actually pays its taxes, just like everybody else has to?