Via Domainfax:
Australia’s five largest banks are prepared to launch a mining tax-style ad campaign to fight the Turnbull government’s $6.2 billion new tax, with Bankers’ Association chief Anna Bligh accusing the government of playing “fast and loose” with Australia’s financial system.
Ms Bligh said Treasury officials were unable to provide key details of how the new tax would work and that the big banks were concerned they may end up paying much more than $6.2 billion over four years.
Speaking after banking representatives met Treasury officials in Canberra on Thursday to discuss the new tax, Ms Bligh suggested the measure may have been “cooked up” in the Treasurer’s office and put in to the budget as recently as last week.
But Treasurer Scott Morrison hit back at suggestions Treasury officials had not yet worked through how the $6.2 billion would be collected and said the banks had turned up and asked: “Could we pay less tax?”
“Treasury was unable to confirm on the basis on how they determined to $6.2 billion estimate of the revenue of this tax. In the face of that, the inability to explain that, of course the banks are worried that this may end up taking more revenue from them.”
“Our large banks … they have about a 20-basis-point advantage in the system effectively because of where they sit in the Australian financial system and the effective, implicit guarantee that they get from taxpayers,” he said.
The new tax is designed to target Australia’s five largest banks – Westpac, ANZ, NAB, Commonwealth and the Macquarie Group – with a 0.06-percentage-point levy on the money the big banks borrow to fund their lending. The measure excludes deposits of less than $250,000.
Are the banks mad? Or is Fake Premier Bligh mad? One of them is because an RSPT-campaign at this juncture will only backfire, further isolating all banks from Canberra, and risking even higher levies as Budget pain marches endlessly on. The banks should consider a fast retreat here and the removal of Fake Premier Bligh who is pissing off both sides of politics.
We already know that she made the Treasurer very upset, undoubtedly greasing the wheels for the levy. Imagine how destructive she will be when Labor takes the helm and she argues against any royal commission day-in, day-out. Judas is not a popular figure in history.
Moreover, is Fake Premier Bligh delivering on her own job description? The Australian Banker’s Association (ABA) includes all banks, including those that benefit from the levy, via The Australian:
Bendigo and Adelaide Bank boss Mike Hirst, who leads the largest lender outside the big four banks and Macquarie, reckons Australians should be sceptical about the sector’s proclamations of doom and gloom after Tuesday’s budget.
Mr Hirst said the government’s introduction of a $6.2 billion “too-big-to-fail” tax on the nation’s largest lenders is simply fixing the unfair advantage and taxpayer subsidy enjoyed by Commonwealth Bank, ANZ, NAB, Westpac and Macquarie.
“All it’s really doing is addressing, in my mind, the free kick that the majors currently get because they’re too big to fail,” Mr Hirst said.
Documents obtained by The Australian under freedom of information laws showed the Reserve Bank estimated the big banks received an annual $3.8bn free kick from an “implicit guarantee” from taxpayers that they would be bailed out in a crisis.
The guarantee gives the big banks a higher credit rating than the smaller lenders, which means the cost of funding their operations is significantly lower.
“It’s an implicit guarantee that has an explicit benefit,” Mr Hirst said. “The majors all get a two-notch upgrade to their rating by virtue of that implied guarantee and Macquarie gets a one-notch upgrade.
From the ABA’s mission statement:
With the active participation of 25 member banks in Australia, the Australian Bankers’ Association provides analysis, advice and advocacy for the banking industry and contributes to the development of public policy on banking and other financial services.
The ABA works with government, regulators and other stakeholders to improve public awareness and understanding of the industry’s contribution to the economy and to ensure Australia’s banking customers continue to benefit from a stable, competitive and accessible banking industry.
The ABA ensures the banking industry’s views are put forward when governments determine policy or legislation. Many areas of Commonwealth and State law and in some cases international law, impact upon the interests of Australian banks. The Australian Competition and Consumer Commission (ACCC), the Australian Securities and Investments Commission (ASIC), the Australian Prudential Regulation Authority (APRA) and the Reserve Bank of Australia (RBA) all regulate banks. Many areas of law, for example taxation or financial sector reform, affect the trading environment for Australian banks and the ABA consults its members to form industry positions on these and many other issues.
The ABA is led by Anna Bligh, Chief Executive Officer, who is supported by a team of senior public policy staff. Anna started in the role in April 2017 and is focused on strengthening trust and confidence in banking and delivering better outcomes for customers.
25 members not five members. Is Fake Premier Bligh “strengthening trust and confidence in banking” by ignoring the increased competitiveness the levy brings, not to mention all but her biggest five members? Is she “strengthening trust and confidence in banking” or working directly against it by making the entire sector look like a bald-faced rent-seeker?
The banks need to face the reality that their Fake Government gambit has failed. You can’t run a fake premier with a fake bureaucracy doing fake royal commissions producing fake reform and expect your stocks are going to rise with Joe Public. He is not a complete idiot. Fake Premier Bligh is the very embodiment this contempt with what was a very fond public profile of Left-wing service now pulverised into flag-waving for its opposite.
The ABA has overreached and Fake Premier Bligh needs the chop pronto.
