In a slice of good news, the Senate last night passed the bank levy bill after Labor voted for it. However, One Nation opposed the levy, with Senator Brian Burston describing it as a “lazy, ugly, cheap solution”.
Meanwhile, the Senate’s economics legislation committee has recommended that the levy should be reviewed within two years. Australian Bankers’ Association CEO Anna Bligh says any future review should consider adding a sunset clause to the legislation, but this has been ruled out by Treasurer Scott Morrison.
From The Australian:
The recommendation for a review was made by the government-dominated Senate economics legislation committee after a hurried one-day hearing on Friday received input from the banking sector.
The committee’s final report argued that a review in two years would allow parliament to assess the impact of the levy on competition in the banking sector and test whether it was contributing to its objective of assisting budget repair…
Ms Bligh yesterday said she supported a Senate review in two years to “examine the impacts of the tax”, including the question of introducing a “sunset clause once the budget is in surplus”.
The push for a review in two years came despite the Treasurer already ruling out the prospect of a sunset clause.
Mr Morrison argues the levy is intended as a permanent “structural measure”, noting that debt will need to be paid down well after the budget is scheduled to return to balance in 2020-21.
MB has supported the banks levy from the very beginning primarily because it would recoup some of the estimated $5 billion in annual taxpayer subsidies provided to the banks annually through the implicit guarantee, as well as contributing meaningfully to Budget repair.
While we would have preferred that the levy was roughly triple in size (0.18% instead of 0.06%), so that it more fully recouped the cost of the taxpayer subsidy, we recognise that the levy as it stands is a major improvement on the status quo.
Well done to the Turnbull Government for pushing this reform through.