A South Australian-style bank tax could be an “attractive option” for Western Australia as it grapples with record debt, Treasurer Ben Wyatt says as he prepares to hand down his first budget in September.
On Thursday, the South Australian Government proposed its major banks be taxed a quarterly levy of 0.015 per cent on bonds and deposits over $250,000.
Mr Wyatt said he had briefly spoken to SA Premier Jay Weatherill and Treasurer Tom Koutsantonis about the tax.
“I am not going to pretend it’s not an attractive option,” Mr Wyatt said.
“Revenue sources that generate lots of money are something that all state treasurers look to.
“I am not saying it’s being considered yet, we’re watching South Australia and seeing how they’re actually going to do it.”
But despite flagging the appeal of the tax, he said the Government had no plans to break its “no new taxes” election pledge.
“It’s still where we stand absolutely,” Mr Wyatt said.
“The Premier made that clear during the election campaign and that’s what we are trying to achieve.”
Power price hike backlash dismissed
His comments come after the Government yesterday announced a $440 yearly increase to household fees and charges that is expected to generate $238 million in extra revenue over the next four years.
It includes a $169 per annum power price increase resulting from a hike in the daily charge people pay to connect to the power grid from 48.6 cents to 94.9 cents a day.
Mr Wyatt dismissed backlash from the Opposition and a warning from an energy sustainability expert that it would send the grid into a “death spiral” and would penalise families that had invested in solar power.
“I am very aware of the death spiral argument but I think people see value in being attached to the grid, particularly those people who want to trade in their electricity supply,” Mr Wyatt said.
“You still need to be able to move electricity around and that’s the value of a grid.”
He said there had been “a range of responses” to the move to lower the cap on some rebates for Seniors Card holders.
Currently both Commonwealth concession card holders and WA Seniors Card holders can access water service rebates capped at $600, local government rates capped at $700 and a 50 per cent rebate on electricity connection charge.
While Commonwealth concession card holders will not lose those benefits, people who only have a Seniors Card will have those three rebates capped at $100 per household.
“I do think that the changes have been fair, [there’s been] no change to eligibility but we have had to take control of the spend around local government and water rate rebates,” Mr Wyatt said.
Call for bank tax proposal to be dumped
The State Opposition has called on the Government to immediately rule out a tax on banks.
WA’s shadow treasurer Dean Nalder said the focus should be on the GST.
“The point of the bank levies were done away with when we introduced GST,” Mr Nalder said.
“The fundamental issues is that the GST is broken and we really need to get that fixed.”
Mr Nalder also questioned if taxpayers would ultimately bear the cost of any tax on banks.
“The banks have a history of just passing it straight through so it would be another impost and burden on ordinary people in their banking accounts,” he said.