In the South Australia budget, the government said it would hit the major banks – ANZ, Commonwealth Bank, Westpac, National Australia Bank and Macquarie with an AU$370 million levy over the next four years.
In the first year, starting 1st July 2017, the government says it will collect $97 million and unsurprisingly, the banks are not impressed, especially as the federal government’s levy is also starting in just over a week.
ANZ’s chief executive Shayne Elliot said the state treasurer has shown a lack of understanding of the important role that banking plays in the state and should have encouraged investment rather than a drag on the economy.
“This deeply concerning tax will likely impact business investment in South Australia at a time when its economy is struggling with low growth, low business confidence and high unemployment,” Mr Elliot said.
Meanwhile, Westpac said the levy was a disgrace. In a statement, the bank said: “Today’s announcement in SA is not only bad public and economic policy, it is not in the interests of South Australians. This distortionary policy could influence decisions banks make about investments in SA.”
A statement from National Bank also criticized the decision as poor policy, adding: “The role of the Australian banks is to support customers and communities and drive economic growth and activity. It is not to be a blank cheque so governments can cover their own budget shortfalls.”
Commonwealth Bank’s CEO Ian Narev commented: “Australia’s economic potential will only be met when state and federal governments deliver sustainable budgets and don’t indiscriminately add new taxes or levies.”