A public campaign to highlight record bank profits that have not trickled down to workers and customers has been launched.
The ‘Stop Bankflation!’ campaign comes from FIRST Union and ActionStation. The report offers solutions to bankflation on industry bargaining and windfall taxes and levies, and means to increasing competition and regulating margins.
Marking the campaign’s launch, a mobile billboard was placed outside of Westpac headquarters in Takutai Square, Auckland which read ‘Our Profits, Your Crisis’, and a group of FIRST Union members marched from Queen Street to Takutai Square.
The report on Bankflation found that cumulative ‘big four’ bank profits have increased 80 percent in the last decade.
Over that time, average annual profit increases for those big four banks – ASB, BNZ, Westpac, and ANZ – have been running at triple the rate of average annual wage increases, negotiated in bank worker collective agreements.
The net interest margins (the difference between lending and borrowing rates) for New Zealand banks 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.
“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,” said FIRST Union General Secretary Dennis Maga.
“Excessive bank profits offer no discernible benefit to anyone in Aotearoa except the Big Four’s shareholders, whose dividends are extracted overseas while everyone here is made worse off.”
“This report focuses on understanding what ‘bankflation’ is and the policy tools we have available to us to ensure that excessive bank profits are returned to the communities they were extracted from.”
FIRST Union delegate and Westpac worker Ace Sieed said he believed peoples’ savings were evaporating during a cost-of-living crisis.
Some of his 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, he said.
“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. Their profits are literally our crisis, and there are still no solid solutions in sight,” said ActionStation Aotearoa Director Kassie Hartendorp.
By Ben O’Connell