Federal Treasurer Scott Morrison says the government has no intention of springing any further surprises on the banking sector by revisiting or raising the bank levy down the track.
While Morrison’s address at a Bloomberg breakfast on Thursday morning was focused on “the economics of opportunity”, the Treasurer was questioned on the government’s bank tax, APRA’s investigation of the Commonwealth Bank and the broader role of financial services’ regulators.
Asked to reassure the major banks and broader financial services sector that no further shocks would be forthcoming, Morrison pointed to his track record across several portfolios.
“We’re certainly done on super, I can assure you of that,” he said. “And with the bank levy. We’ve set it at the level we thought it should be set at. Hopefully what people will have noticed from my time as a Minister is that I’ll go in, I’ll deal with an issue and that will be that.”
While the Treasurer had earlier spruiked the government’s achievements in legislating tax cuts for small and medium sized businesses, it was put to him that he had ruffled feathers amongst large companies in the financial services and energy sectors.
“The banking and financial system, the energy sector are not free-market nirvana sectors. It’s not like those sectors are operating in a regulation-free environment. They’ve been built on regulation, frankly,” he said.
“And over time, large businesses who live in and depend on a regulatory environment can get very good at seeing those regulations work to their advantage. And the balance between those businesses and customers can get out of whack.
“So the actions I’ve been taking with the Prime Minister, whether it’s in the energy sector or whether it’s in the banking sector, are really about trying to restore greater competitive pressures in these markets by increasing the power of the customer.
“Complexity and inertia in highly-regulated markets is big business profit’s best friend and the often the consumer’s worst nightmare. Over time you need to recalibrate regulation to ensure the customer is at the centre of the universe.”
‘New Red Labor’
Morrison would not be drawn to comment on what APRA might conclude from its investigation into the CBA but noted it had taken a “very serious set of issues” to get to this point.
“It’s important that the regulator just goes and does its job, which is what it’s doing. I look forward to them (APRA) getting into it and it’s not going to take them three years or five years,” he said.
“They’ll get it done in six months … and then they’ll be able to take action. They won’t be recommending things, they’ll be doing things.”
Earlier, in his prepared address, Morrison blamed flat wages growth for the rise in neo-socialism and protectionism around the world, adding that it had “opened the door to the politics of envy”.
“The opportunism of Bill Shorten's New Red Labor has embraced these forces to form a new flat earth economic alliance,” he said.
“Whilst the improvements we are seeing in our economy are welcome, they are of limited comfort so far to households who have not yet seen this translate into an improvement in their incomes.
“This is not just a problem we are facing in isolation; wage growth has been weak in many developed economies, as the global economy transitions out of the post GFC funk that has lingered longer than most had predicted.”