1 00:00:00,080 --> 00:00:03,680 Speaker 1: So the government is considering seeking advice from Inland Revenue 2 00:00:03,680 --> 00:00:06,480 Speaker 1: around the tax settings for our major banks. Finance Minister 3 00:00:06,600 --> 00:00:08,760 Speaker 1: Nikola Willis wants advice ahead of next year's budget on 4 00:00:08,760 --> 00:00:10,840 Speaker 1: where the banks are paying their fair share. Doctor Claire 5 00:00:10,840 --> 00:00:13,360 Speaker 1: Matthews is a massive university banking expert and with us 6 00:00:13,440 --> 00:00:16,880 Speaker 1: right now. Claire, Hello, Mariana Heather. Is there any doubt 7 00:00:16,920 --> 00:00:18,360 Speaker 1: that banks are paying their fair share? 8 00:00:20,800 --> 00:00:23,239 Speaker 2: I don't think there is, although some people possibly will 9 00:00:23,239 --> 00:00:27,120 Speaker 2: have that doubt. The evidence is that for some time 10 00:00:27,200 --> 00:00:29,760 Speaker 2: now they have been paying the amount of tax that 11 00:00:29,800 --> 00:00:31,680 Speaker 2: you expect them to pay. They're paying it about the 12 00:00:31,680 --> 00:00:33,920 Speaker 2: corporate you know, when you look at the eral amount 13 00:00:33,920 --> 00:00:37,280 Speaker 2: of tax are paying, they're paying a percentage that aligns 14 00:00:37,280 --> 00:00:38,960 Speaker 2: with the corporate tax, right, which is what they should 15 00:00:38,960 --> 00:00:39,320 Speaker 2: be paying. 16 00:00:39,440 --> 00:00:41,080 Speaker 1: Yeah, So what do you think is motivating this? 17 00:00:41,200 --> 00:00:45,920 Speaker 2: Then? The general attitude towards banks. We don't like the 18 00:00:45,960 --> 00:00:48,480 Speaker 2: facts for some reason, that they make money, that they're 19 00:00:48,520 --> 00:00:50,639 Speaker 2: a big organization, and therefore that money is a lot 20 00:00:50,680 --> 00:00:53,840 Speaker 2: of money, and therefore the government looks at trying to 21 00:00:53,840 --> 00:00:55,360 Speaker 2: take more off of So. 22 00:00:55,480 --> 00:00:57,400 Speaker 1: Just a case of turning them into a whipping boyli 23 00:00:57,400 --> 00:00:58,240 Speaker 1: like the supermarkets. 24 00:00:58,240 --> 00:01:01,960 Speaker 2: Perhaps I don't think it's turning them into They've been 25 00:01:01,960 --> 00:01:04,560 Speaker 2: a whipping boy for at least as long as a supermarket, 26 00:01:04,680 --> 00:01:06,720 Speaker 2: So absolutely, that's what it's about. 27 00:01:07,040 --> 00:01:08,840 Speaker 1: Yeah, I mean, is it possible that there is an 28 00:01:08,880 --> 00:01:11,240 Speaker 1: ulterior motive here clar if you believe the rumors that 29 00:01:11,280 --> 00:01:13,280 Speaker 1: are coming out of Wellington. There seems to be some 30 00:01:13,319 --> 00:01:17,040 Speaker 1: consideration of perhaps dropping the corporate tax rate. If you 31 00:01:17,120 --> 00:01:20,160 Speaker 1: drop the corporate tax rate, but then you pop another 32 00:01:20,200 --> 00:01:21,880 Speaker 1: tax on top of the banks, you may be able 33 00:01:21,880 --> 00:01:23,840 Speaker 1: to keep them paying what they're paying while everybody else 34 00:01:23,840 --> 00:01:25,320 Speaker 1: pays less. What are the chances? 35 00:01:26,680 --> 00:01:31,360 Speaker 2: Oh? Absolutely, They pay a very large portion of something 36 00:01:31,400 --> 00:01:34,520 Speaker 2: like twenty percent of total tax quite total corporate tax 37 00:01:34,600 --> 00:01:37,480 Speaker 2: in New Zealand, so they're paying a huge amount of tax. 38 00:01:37,760 --> 00:01:39,760 Speaker 2: So if you drop the corporate tax rate but keep 39 00:01:39,840 --> 00:01:42,520 Speaker 2: the banks tax at a higher level, the government could 40 00:01:42,560 --> 00:01:45,360 Speaker 2: manage to avoid the excellent impact on their text tape. 41 00:01:45,440 --> 00:01:47,960 Speaker 1: Yeah, exactly. You might be able to do that with 42 00:01:48,000 --> 00:01:51,680 Speaker 1: something like a major bank lever or something like that. Yeah, yeah, absolutely, Yeah, 43 00:01:51,720 --> 00:01:54,160 Speaker 1: And what do you reckon, Like, what level do you 44 00:01:54,160 --> 00:01:55,559 Speaker 1: set a major bank lever at? 45 00:01:57,800 --> 00:01:59,760 Speaker 2: Well, I guess you said it at whatever you need 46 00:01:59,800 --> 00:02:02,160 Speaker 2: to to maintain your text tech all to increase your 47 00:02:02,160 --> 00:02:02,680 Speaker 2: text tape. 48 00:02:03,080 --> 00:02:07,000 Speaker 1: It's reasonable, though, I mean, let's let what do you 49 00:02:07,120 --> 00:02:09,880 Speaker 1: think that the government may think is reasonable? Set aside 50 00:02:09,880 --> 00:02:11,600 Speaker 1: what you or I may think. Are we talking three 51 00:02:11,639 --> 00:02:13,440 Speaker 1: percent four percent? 52 00:02:16,000 --> 00:02:18,200 Speaker 2: It's really hard to know. Yes, if they were to 53 00:02:18,240 --> 00:02:20,560 Speaker 2: drop let's say they were to drop the top corporate 54 00:02:20,560 --> 00:02:22,800 Speaker 2: text rates from twenty out to twenty five, then they 55 00:02:22,840 --> 00:02:25,360 Speaker 2: might say that they would lead them the banks at 56 00:02:25,360 --> 00:02:27,920 Speaker 2: three percent, an extra three percent so that they would 57 00:02:27,919 --> 00:02:31,600 Speaker 2: say at the same level so they're not disadvantage further 58 00:02:31,600 --> 00:02:35,160 Speaker 2: from what they are currently and potentially that would mean 59 00:02:35,160 --> 00:02:37,440 Speaker 2: that the impact for the bank, for the government would 60 00:02:37,440 --> 00:02:38,480 Speaker 2: be minimized. 61 00:02:39,200 --> 00:02:40,520 Speaker 1: It's good to talk to you always as thank you 62 00:02:40,520 --> 00:02:43,760 Speaker 1: for your time, Doctor Clare Matthew's banking expert at Massive University. 63 00:02:44,240 --> 00:02:47,160 Speaker 1: For more from the Mic Asking Breakfast, listen live to 64 00:02:47,280 --> 00:02:50,359 Speaker 1: news talks. It'd be from six am weekdays, or follow 65 00:02:50,400 --> 00:02:51,959 Speaker 1: the podcast on iHeartRadio.