A Liberal-leaning think tank has written to all MPs urging them to oppose the Turnbull government’s bank levy, saying it amounts to “quasi nationalisation” of the major banks and will impede economic growth.
The Institute of Public Affairs, often considered a breeding ground for conservative MPs, says the levy will discourage investment in Australia and its costs will inevitably be borne by investors and customers of the big banks.
“The government’s proposed changes will undermine the free enterprise system by effectively turning banks into an arm of the bureaucracy,” a briefing note on the levy says.
The institute argues the levy will be passed onto customers and shareholders of the banks.
“The government’s proposed changes to the banking sector should be abandoned. The changes are illiberal, amount to the quasi-nationalisation of the major banks, and will permanently reduce economic growth,” the briefing paper says.
The legislation to set up the levy, which is due to begin operation from July 1, 2017, is expected in Parliament this week.
Treasury officials will be questioned about the levy at a budget estimates committee on Monday.
The legislation to establish the levy has been a closely-guarded secret, with the five banks affected required to sign non-disclosure agreements before seeing it.
The banks say they have still not been given modelling they were promised by the Treasury at a meeting two weeks ago.
They last week wrote to all MPs asking for the inclusion of a sunset clause to the levy that would be triggered when the budget returns to surplus.
They also want the levy set at a fixed rate and set out in the legislation.
The opposition – which supports the levy – will continue to question the government about the amount of money raised by it.
Last week, it claimed there is a $2 billion “black hole” in the revenue the levy will raise.
The government has said it is supposed to raise $1.6 billion in its first year, and $6.2 billion over four years.
But the opposition attacked the government over its revenue forecasts after Westpac, Commonwealth Bank, ANZ and NAB released estimates that suggested $965 million would be raised, after tax, in the first year of operation. Macquarie, the only bank yet to release an estimate of what it will pay, is not expected to make up the shortfall.
However, the government believes the gross revenue figure of about $1.4 billion from the big four banks, when combined with Macquarie’s yet-to-be-revealed figure, means the $1.6 billion revenue estimate is on track.
The story Bank levy amounts to ‘quasi nationalisation’ of the major banks: think tank first appeared on The Sydney Morning Herald.