Work towards the Government introducing a prudential levy, that will tax banks and other entities regulated by the Reserve Bank, continues

The National Party may have ruled out new taxes, including a bank tax, if it's returned to government in November's election. However, the proposed prudential levy unveiled in May's budget, which would raise $209 million over three years from banks and other entities the Reserve Bank regulates, is still going ahead.

On Sunday National leader Christopher Luxon and finance spokesperson Nicola Willis announced there would be no new taxes if National is re-elected in November's election. They said this "includes no accommodation levy or bank tax."

However, a National Party spokesperson clarified to interest.co.nz that this doesn't mean the prudential levy, announced by finance minister Willis in May, is being shelved.

"National’s promise is no new taxes this election," the spokesperson said. "This means no new taxes beyond existing taxes and those already agreed to."

"The prudential levy was agreed to in this year’s Budget. Taxpayers currently pay for the cost of the banks’ prudential regulation, and the levy means that obligation shifts away from taxpayers and onto the banks," the National spokesperson says.

Meanwhile, the Reserve Bank, which recently opened consultation on the prudential levy, confirmed it's pushing ahead with the consultation.

"The Reserve Bank continues to undertake the consultation process on behalf of the Minister of Finance. The consultation relates to the implementation of the Government's in principle decision, as part of Budget 2026, to introduce a prudential levy and seeks feedback on the proposed levy framework. The consultation closes on 16 October," a Reserve Bank spokesperson said.

The prudential levy consultation paper estimates the tax would raise $209 million over three years from deposit takers - including banks - insurers and financial markets infrastructure (FMIs) providers. Deposit takers could pick up the tab for $113 million, or 54% of the total, insurers $81 million, or 39%, and and FMIs $15 million, or 7%. 

Based on their total assets as of March 31, the proposal would see ANZ NZ, with $219 billion in assets, pay in the vicinity of $10 million annually. BNZ, ASB and Westpac NZ, with between $130 billion and $144 billion of assets each, would all pay several million dollars, and Kiwibank, with assets of $43 billion, would pay significantly less. IAG NZ, the country's biggest insurer, could be looking at an annual levy north of $5 million.