A new proposed tax on five Australian banks by the South Australian Government is an outrageous cash grab without policy substance, the Australian Bankers’ Association chief executive Anna Bligh said late on Thursday.
It is believed that the tax would be structured in the same way as the federal government's bank levy, which passed the Senate this week, and it will also apply only to the big four banks and Macquarie Group.
According to State Treasurer Tom Koutsantonis, the new South Australian major bank levy will be introduced from July 1 and is estimated to deliver $370 million across the forwards estimates.
“States are not responsible for banking policy. There is absolutely no policy reason for this announcement, other than a need for the South Australian Government to raise revenue in a desperate political move,” Bligh said. “Let me be clear – it is not the job of banks to prop up government budget shortfalls.
“South Australia is a state that needs economic confidence – at 6.9 per cent it has the highest unemployment rate nationally. Today’s announcement is the worst possible signal to the business community in South Australia and will make South Australia less competitive, potentially driving jobs to other states.
“This announcement is staggering for a group of Australian banks that are already among the highest corporate tax payers. These are banks that provide jobs for South Australians, lend to South Australian businesses and help South Australians into their homes.
“Tax policy in Australia is now becoming a joke at the whim of political opportunism and South Australia is trying to impose triple dipping for bank taxation.
“The banks impacted by this proposal pay full corporate tax, the Federal Government has just passed a new bank tax and now the South Australian Government is trying to impose a third state tax. The impacted banks call on every Australian Premier and First Minister to rule out a similar tax.
“Furthermore, when the GST was introduced, a range of state taxes were eliminated, including some state taxes relating to financial institutions. Today’s announcement is a step back in time.”