Australian bank levy approved by Senate
(20 June 2017 – Australia) The Australian Senate passed the Government’s new A$6.2 billion major bank levy in full this week.
A Senate committee recommended that the policy pass through with minor amendments suggested to the bill.
The federal opposition party, Labor, said it would “not stand in the government’s way” and would support the bill. However, it added that the bill needed to include recommendations to “demonstrates how the Treasurer has botched the policy process”.
The inquiry held a one-day hearing on Friday prior to providing its findings. Inquiry chairwoman, Liberal senator Jane Hume, said the levy “adequately reflects an appropriate transfer” back to the community of some of the financial benefits gained by Australia’s biggest banks.
Additional recommendations passed down from the Chairwoman include biennial reviews to assess its effect on competition and the effectiveness of the levy itself, Treasury access technical aspects of the bill to ensure there is no double taxation and that the department further explain the method it uses to calculate the lenders’ taxable liabilities.
Senator Hume said the legislation should be amended so the government could, on the advice of the Australian Prudential Regulation Authority, suspend the levy in “extreme financial or economic circumstances”.
Australian Bankers’ Association chief executive Anna Bligh said she was “pleased to see the committee take the concerns of affected banks seriously”.
“We urge the federal government to more fully investigate the issue of double taxation, as recommended by the committee, to ensure that Australian banks are not disadvantaged when they compete offshore,” Bligh said.
Senator Hume also queried why Macquarie Bank was subject to the levy when foreign lenders were not. The bank has argued its main business operates offshore and its domestic retail arm is small when compared with the big four banks.
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