Greens senator, Peter Whish-Wilson, has claimed that the Turnbull Government’s 0.06% levy on the big banks’ liabilities will raise $1.5 billion less than forecast because the levy will be tax deductible for the banks. From The Guardian:
A Greens senator has warned the Coalition’s $6.2bn bank levy could raise $1.5bn less than expected over four years, given the cost is tax-deductible.
Analysis by Tasmanian senator Peter Whish-Wilson, a former banker, suggests the amount raised could be almost quarter less than expected over the next four years.
His analysis shows that while the levy of 0.06% on the big five banks would raise $1.56bn a year on 2015 Australian Tax Office figures – as outlined in the budget – once deductibility was taken into account, money raised would drop to $1.17bn.
“The big banks have reaped billions because of the implicit and explicit guarantees that the government provide them,” Whish-Wilson said. “These guarantees means that the big banks can take bigger risks and make more money but it is the public who gets left with the mess if the shit hits the fan.
“Once you take into account that the new levy is tax-deductible, no individual bank will have to pay more than an extra $320m per year in additional taxes and levies”…
“If we don’t raise new revenue from the incredibly profitable banking sector then, given the track record of the government, it will be every day Australians who will have to make up the difference.”
I’m pretty sure the Australian Treasury has taken the deductability of the levy into account in its Budget forecasts. The Budget measure, shown below, states “the levy will raise $6.2 billion over the forward estimates net of interactions with other taxes (principally corporate taxes)”:
A government spokesman also confirmed the $6.2 billion figure is net of tax deductions, as well as explained that the levy is payback for the implicit guarantee provided by taxpayers to the banks, which is estimated to be worth 20 basis points (i.e. more than three times the announced bank levy).
