NZ Tax Bill to hot Australian Banks
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New Zealand has been an unhappy hunting ground in recent years for Australia’s top four banks and it seems to be the case again with the big banks looking at a AUD$1.9 billion tax bill after a ruling by the New Zealand High Court.
The decision was against the National Australia Bank regarding sic structured finance transactions. While an appeal is a given the NAB are looking at needing to raise capital to cover the $550 million approx provision.
Justice John Wild said the transactions had “no commercial purpose or rationale”, other than to use the bank’s tax capacity to generate exempt income. The decision puts not only NAB but CBA, Westpac and ANZ on a collision course with regulators and a similar outcome.
It would seem ANZ and Westpac have adequate provisions already in case whereas CBA was less clear.
NZ Reserve Bank cut rates by 1.00%
Alan Bollard, the governor of the Reserve Bank of New Zealand cut interesr rates by 1.00% today in a move to help stimulate the local New Zealand economy.
The cut reduces the New Zealand cash rate to 6.50% and governor Bollard indicated more could be on the way depending upon how quick the global economy reacted to the stimulus packages announced throughout the world recently.