The Reserve Bank of New Zealand has launched a consultation on behalf of the Minister of Finance on a proposed levy to recover the full cost of prudential regulation and supervision from regulated entities. Following the government’s in-principle decision, the levy would apply to deposit takers, insurers and financial market infrastructure operators, shifting about NZD 70 million in annual costs from the Reserve Bank’s existing funding arrangements to industry. The estimate excludes goods and services tax and collection costs. The proposed sector allocation is 54% for deposit takers, 39% for insurers and 7% for financial market infrastructures, equivalent to indicative annual amounts of NZD 37.8 million, NZD 27.3 million and NZD 4.9 million. The Reserve Bank prefers hybrid calculations for deposit takers and insurers, combining a fixed charge with a variable component based on total assets or New Zealand insurance revenue. It favors a flat charge of about NZD 1.23 million for each of the four financial market infrastructure operators. Temporary waivers are proposed for non-bank deposit takers and certain overseas reinsurers and captive insurers during forthcoming regulatory transitions. Submissions are due by Oct. 16, 2026, with final Cabinet decisions expected in early 2027. If adopted, the levy would first cover the 2027-28 financial year, be calculated annually in arrears and undergo a methodology review at least every five years.

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