TREASURER Scott Morrison says the major banks have to sign confidentiality agreements before seeing the draft legislation for the $6.2 billion levy on their business.
Mr Morrison said that the Turnbull Governmernt is in talks with the major banks over the new Bank Levy, which was announced in the Federal Budget earlier this month.
“The major banks have made individual submissions to the Government and we are respecting requests made for confidentiality of submissions, including any subsequent comments they may provide,” Mr Morrison said in a statement.
“The nondisclosure arrangements used in this case are not an irregular practice for governments when consulting with commercial entities over draft legislation, and have been used recently by the Turnbull Government for the Multinational Anti-Avoidance Laws and the Diverted Profits Tax.
“Once the legislation is finalised, it will be introduced to the Parliament in the upcoming sitting fortnight, and will be open to the full scrutiny of the Australian Parliament.”
Mr Morrison also refuted suggestions by Labor that the bank levy was a “last minute” policy.
“The bank levy measure has been well considered over many months and after the announcement in the Budget we are now in a position to undertake this final consultation before introducing the legislation to the Parliament in accordance with our original schedule,” Mr Morrison said.
Labor is expected to get a public inquiry into the proposed new bank tax.
Shadow Treasurer Chris Bowen earlier today said there were “legitimate issues” to be considered. National Australia Bank chairman Ken Henry called for an inquiry yesterday (Tuesday).
Bowen said an inquiry was standard procedure but was particularly necessary in this case, claiming the tax appeared to be “plonked into the Budget at the last minute”.
The inquiry was not likely to delay the tax from passing both houses of federal parliament by June 30 with Labor Leader Bill Shorten previously stating his support.
“I’m not going to pick a fight over this — the budget can’t afford a fight over this,” Bowen told reporters in Canberra today.
“[A Senate inquiry is] very standard procedure for a piece of legislation to look at unintended consequences to consider matters raised,” he said.
“And it is more than appropriate in this case because this was rushed, it was introduced with no consultation, and I do think there were valid issues, legitimate issues to be considered.”
The banks had a right to question why foreign banks operating in Australia were exempt from the tax, he said.
“I think that’s a legitimate issue for consideration.
“If the Government says it is about competition, why are big foreign banks exempt that are operating in Australia, that are competing with Australian banks?
“It could be called reverse protectionism.”
The major banks tried a new tack in their war against the $6.2 billion bank tax today, raising concerns politicians could have a “blank cheque” to lift the levy unless it was locked into legislation.
Bank representatives argued the Government’s proposed tax rate — a 0.06 per cent annual fee on liabilities of more than $100 billion — should be locked into law rather than left open for Mr Morrison or a future Labor Government to change.
Australian Bankers Association chief Anna Bligh told The Australian the tax rate should be “baked into legislation” to ensure any changes would have to pass both houses of parliament.
“Anything less would be writing a blank cheque for the Treasurer and any subsequent government,” Ms Bligh said.
The ABA’s concerns are based on a UK bank tax, where the levy was initially 0.04 per cent in 2011, raised to 0.07 per cent in 2012 and then later lifted to 0.21 per cent.
Revenue from the British bank tax is set to increase to more than $30 billion over four years to 2020.
Westpac chief financial officer Peter King told The Australian the levy and the number of years it would be imposed should be set in legislation.
“Westpac believes the bank levy rate should be set out directly in the legislation like the budget repair levy, which prescribed the rate and the period it would operate,” he said.
“Given the objective of the new levy is to repair the budget, the legislation should also be drafted so that it ceases once the budget is in surplus.
“If future governments want to change the levy it should be subject to a change in legislation, where it can be appropriately debated in the parliament.”
The Treasurer said at the weekend he had “no plans” to raise the levy.
This latest track comes after National Australia Bank chairman and former Treasury Secretary Ken Henry yesterday warned the tax would impact the economy and could weaken the banks’ ability to respond to any economic headwinds.
Online Source: news.com.au