Banks to fight 'fast and loose' $6.2b tax

Xavier Trudeau
Mai 16, 2017

Treasurer Scott Morrison has introduced to parliament the second part of his 10-year company tax cut plan, applying to those turning over more than $50 million.

Australia's Treasurer has urged the nation's big banks to absorb a new 6.2-billion-Aussie-dollar (4.56-billion-U.S. -dollar) levy despite a warning from the banks that the tax hike would be handed down to customers.

The new tax is created to target Australia's five largest banks - Westpac, ANZ, NAB, Commonwealth and the Macquarie Group - with a 0.06-percentage-point levy on the money the big banks borrow to fund their lending. She called on the Senate crossbench to closely scrutinise the proposed law - potentially delaying its July 1 introduction - and said the measure was proceeding with "indecent haste".

Treasurer Scott Morrison described the levy as an "additional and fair contribution" from the major banks, and is similar to measures imposed in other advanced countries.

The 0.06-percentage-point levy on money the big banks borrow to fund their lending excludes deposits of less than $250,000.

Those savings, including welfare reforms, had artificially reduced the red ink in the budget after they were blocked by opposition lawmakers in a hostile Senate where the government has a wafer-thin majority.

"They already don't like you very much".

Former prime minister John Howard has slammed the latest Budget for bashing the big banks with a new tax. Prove them wrong. Don't confirm their worst impressions.

These are small "l" liberal policies that Mr Turnbull's supporters have been longing to see since he took over leadership of the Liberals, but they should not scare the more conservative factions in his party. The move will help the Australian Government balance its books and pay for disability insurance.

Mervyn Tang, director of Asia-Pacific sovereigns at Fitch Ratings, said the new revenue measures in the budget implied a faster reduction in the government deficit.

Westpac chief executive Brian Hartzer said the levy was a "stealth tax" that would reduce the global competitiveness of the sector, while flagging a possible increase in interest rates for borrowers, job cuts, or a reduction in returns to shareholders.

"Not only has the government kept the banks and the public in the dark on this new tax, it is now clear that they have kept Treasury in the dark too", she says.

"However, as every business owner or employee knows, every extra cost needs to be borne by customers or shareholders, or a combination of both".

Treasury officials were unable to answer key questions at a briefing today with banks in Sydney, according to Anna Bligh, CEO of the Australian Bankers' Association.

"Contrary to the government's claim that the tax will only be levied on banking liabilities, the reality is that it will affect the entire banking system", Bligh said in a statement.

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