Finance Minister Nicola Willis keeps secret documents on if banks paying fair share of tax ahead of Budget 2026
Finance Minister Nicola Willis asked for the advice last year. Photo / Alyse Wright
The Finance Minister is withholding documents relating to whether major banks are paying their fair share of tax, as questions remain over whether any changes to their tax settings are coming.
Nicola Willis told the Herald “no decisions have been made” and the work programme relating to banks is “ongoing”.
The Herald last year revealed Willis had quietly asked the Inland Revenue Department to review whether income tax settings were being correctly applied to banks, ahead of potential consideration at Budget 2026.
Following that, Willis said a “wide range of options” were being considered and she had a particular interest in how New Zealand’s bank tax regime compares with Australia. She wouldn’t rule out a new levy.
Six months on, the Herald asked her office to provide any documents or advice she had received since July last year on whether banks were paying their fair share of tax, including anything on a potential new bank levy.
Willis responded this week, saying she had “decided to withhold in full all documents relating to your request, including the titles”.
She cited a provision in the Official Information Act (OIA) allowing information to be withheld to “maintain the current constitutional conventions protecting the confidentiality of advice tendered by ministers and officials”.
Often when this provision is used to withhold information, it is on a temporary basis while the advice remains under active consideration.
It’s usual for pre-Budget documents to remain confidential until after decisions are made and publicised, and Willis had said she would keep this close to her chest until the Budget.
The Herald asked the minister about the contents of the documents and whether she could rule out any new tax, levy or the like on tax settings affecting banks.
Willis said the Government’s work programme relating to banks is “ongoing” and “no decisions have been made”.
“It is therefore not appropriate to get ahead of Cabinet,” she said.
Willis highlighted that the Inland Revenue Department “has been consulting on whether banks operating in New Zealand can shift some of their profits out of New Zealand”.
“I note that banks already pay the Financial Markets Authority Levy and will begin to pay the Depositor Compensation Scheme Levy from this year.”
She said the Government wants to “improve competition” and ensure Kiwis “get a fair deal”.
Willis has previously refused to get into a “rule-in, rule-out game” about potential Budget initiatives.
However, she has also been pushing for Labour to rule in or rule out certain taxes ahead of this year’s election.
“Chris Hipkins must rule out expanding his CGT [capital gains tax] and the Greens’ inheritance tax, wealth tax and increases to company tax, personal income tax and mining taxes,” she said last week.
In her comments last year, Willis said she was interested in how New Zealand’s bank tax regime compares with Australia’s, in light of the “significant profits Australian banks make from Kiwi customers”.
One difference between the two regimes is that Australia has a major bank levy on authorised deposit-taking institutions with total liabilities of more than A$100 billion ($108b). The Treasurer at the time, Scott Morrison, said it was a “fair contribution” that would “even up the playing field with smaller banks”.
Willis would not rule out a similar levy last year.
She said there were issues relating to “the way that parent banks and branch banks in New Zealand interact for tax purposes”.
“There’s some very arcane and complex tax law in that area where the OECD have guidance and New Zealand does it slightly differently.”
The question of potential new taxes or levies came up just this week when the Government announced a new levy to fund the construction of a liquefied natural gas (LNG) import facility, which is expected to put downward pressure on some electricity prices. The levy was called a “gas tax” by Labour, which argued it would be passed through by power companies to consumers.
Labour leader Chris Hipkins said on Wednesday that Willis “is playing an ongoing game of Simon Says”.
“What she says and what she does are different things. She has been hiking up every levy and tax she can get her hands on and New Zealand households are feeling the price of it.”
Jamie Ensor is the NZ Herald’s Chief Political Reporter, based in the Press Gallery at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist in 2025 for Political Journalist of the Year at the Voyager Media Awards.