Stop Bankflation: Campaign Calls For Action On Excessive Bank Profit Prolonging Cost Of Living Crisis

Today, a public campaign to ‘Stop Bankflation!’ was launched by FIRST Union and ActionStation to highlight record bank profits that have not 'trickled down' to workers and customers.

This morning, 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 to mark the launch of the ‘Stop Bankflation’ campaign.

The attached report on Bankflation in Aotearoa finds that:

• Cumulative "Big Four" bank profits have increased 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.

"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 Dennis Maga, FIRST Union General Secretary.

"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."

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. Their profits are literally our crisis, and there are still no solid solutions in sight," said Kassie Hartendorp, ActionStation Aotearoa Director.

Solutions in the short report to bankflation include:

• Industry bargaining
• Increase competition
• Regulate margins
• Windfall taxes and levies

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