New Zealand has introduced a new prudential levy on banks, non-bank deposit takers, insurers, and other financial market participants in the country. The new levy will help cover the costs of services provided by the Reserve Bank of New Zealand.
New Zealand Finance Minister Nicola Willis in her budget speech for 2026 said, “This mirrors the approach taken by the Financial Markets Authority and the Commerce Commission which fund much of their activity through levies on financial market participants. It is also consistent with international practice in countries like Australia, Canada and the United Kingdom.”
Ms Willis said, “This levy will ensure the cost of regulation and supervision is borne by financial market players rather than taxpayers. The prudential levy is estimated to recover around NZ$209m ($125m) over the next four years. The levy will be paid to the Reserve Bank, with the revenue returned to the Government through an increased dividend.
Finance Minister said, “In a more unstable world, it’s important we strengthen the financial system, so it keeps working for Kiwis when times get tough.”
According to additional notes accompanying the 2026 budget, New Zealand’s financial services industry is large and profitable and the revenue from the new levy will be less than 1% of the total profits of the big four banks alone.
The new levy will apply to deposit takers, insurers and financial market infrastructure providers.There are currently 27 registered banks and 14 licensed non-bank deposit takers in New Zealand. Also, there are currently 81 licensed insurers in New Zealand, operating across the general, life, and health insurance markets. Currently five designated FMIs also operate in the country. They arrange and provide for the clearing, settlement and recording of financial transactions like payments, securities, and derivatives.