ANZ chairman David Gonski’s four-point plan to fix bank levy

ANZ chairman David Gonski has weighed into the debate over the government’s new bank levy, outlining a plan to tackle the tax in a letter to shareholders.  


Bank tax backlash

The former head of Treasury Ken Henry has criticised the government’s bank tax, saying it’s misleading to suggest it won’t be passed on to customers.

Mr Gonski, who is also the Turnbull government’s key education adviser, said the bank was disappointed by the new tax but would lobby the government to ensure it was “fair and efficient”. 

“Clearly we are disappointed at the introduction of this new tax. However, given the support it has in parliament, we accept that it will pass into law,” he said.

“Our focus has been to work constructively with government to ensure the legislation associated with tax is as fair and efficient as possible in the circumstances.”

Mr Gonski, who has until now stayed silent over the levy, said the bank would lobby for the tax: 

  • to be extinguished once the federal budget was repaired;
  • to be at a fixed level so it could not be increased in future without the agreement of both houses of parliament;
  • to be referred to the Council of Financial Regulators for any proposed adjustment; 
  • to be applied equally to large foreign banks operating in Australia.

The big four banks expect to pay $965 million combined in extra tax as a result of the levy and have appealed to shareholders to help fight against it.

Westpac expects to take the heaviest blow at $260 million a year after tax, while NAB ($245 million), ANZ ($240 million) and CBA ($220 million) also outlined significant costs.

Mr Gonski said it was not clear whether the tax would impact shareholder returns.

“The net financial impact, including the bank’s ability to maintain its current fully franked ordinary dividend, will be dependent upon business performance and decisions we make in response to the tax,” he said.

He said the tax was further evidence of the breakdown of trust between banks and the community. 

“It is not in shareholders’ interests or the national interest that the relationship between banks and the community continues in this way,” he told shareholders.

“We clearly have much to do but our aim is to work even harder to help repair the relationship for the good of shareholders and of all Australians.”

Source

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