Government trying to avoid scrutiny of bank levy, banking association says

Posted

May 25, 2017 15:11:27

Bankers have ramped up their war against the new tax on their businesses, with the Australian Bankers’ Association accusing the Federal Government of trying to stymie debate and scrutiny of the plan.

Key points:

  • Bankers’ association says Governmnet has not given Senate enough time to examine bank levy
  • Banks say they have been unfairly targeted to prop up the budget
  • Government says banks can shoulder the burden of new levy

ABA chief executive Anna Bligh has written to the Senate Economics Committee demanding a full inquiry into the banking levy, which the Coalition hopes would raise $6.2 billion over the next four years.

Ms Bligh said the Government moved a Senate motion just after the 2017 budget was handed down, forcing committees scrutinising bills due to come into effect from the beginning of the new financial year to report back to the Senate by June 13.

She argued that was unreasonable considering the Senate was currently dealing with a fortnight of budget estimates hearings.

“It is unlikely the committee would be able to hold appropriate public consultations to consider the major bank levy legislation before their reporting date of 13 June 2017,” Ms Bligh wrote to the committee.

“The ABA considers that further consultation is crucial to ensure all stakeholders have a full understanding of the implications of this tax on the economy and financial system.

“We are concerned this motion impacts the Senate’s ability to vote on major revenue legislation given there has been no independent scrutiny or guidance.”

READ ---  Sierra Leone Mudslide: 300 Dead, Red Cross Believe 600 Missing

The bank levy is aimed at Australia’s largest five banks — Westpac, Commonwealth, ANZ, NAB and Macquarie.

Four of the five have told the share market they expect the tax will only cost them $965 million, after company tax deductions.

Prime Minister Malcolm Turnbull admitted in Question Time earlier this week that the new levy would be tax deductible, leading to allegations from Labor that the levy would not raise as much as the Government had forecast.

The banks have railed against the levy, arguing they are being unfairly targeted to prop up the budget bottom line and that the cost of the tax would have to be passed on to customers.

They have also criticised what they describe as a lack of information from Treasury about the formulation of the tax, and panned the short deadline the banks were given to make formal submissions to the Government on the matter.

NAB chairman Ken Henry has also called for a full Senate inquiry.

The Federal Government has said it remains steadfast in its support of the proposal, and that the banks can shoulder the burden of the new levy.

Topics:

banking,

federal-government,

tax,

australia

Source