New bank tax hits all Australians
10 May, 2017
Westpac Group CEO, Brian Hartzer, said the new bank tax is a hit on the retirement savings of millions of Australians as well as all bank customers.
This levy is a stealth tax on their life savings, the shares in their superannuation accounts, and it will make Australia’s banks less competitive.
“Yesterday, $14 billion of value was wiped off Australian bank shares because of speculation around this new tax.
“There is no ‘magic pudding’. The cost of any new tax is ultimately borne by shareholders, borrowers, depositors, and employees.
“The Australian banks are already the largest taxpayers, with Westpac the country’s second largest taxpayer. Westpac already pays over 30% of its profits in tax and this will now increase even further,” Mr Hartzer said.
“While similar taxes operate in other international jurisdictions, they were introduced to recover the cost of Governments having to take over their banks. No taxpayer funds have been used to prop-up the Australian banks. In addition, international jurisdictions that apply measures such as this already have much lower corporate tax rates than Australia – for example, in the UK the corporate tax rate is 20%.
“It is disappointing that the Australian Government has implicitly favoured large foreign banks over Australian banks operating in their home market.
“In addition these reforms are directly counter to APRA’s objective of making the banks unquestionably strong, as higher taxes reduce the banks’ ability to generate capital that supports lending and stability in times of stress.”
Westpac is currently examining the other banking measures announced last night in the budget.
“Westpac has for some time been supportive of reform in the banking sector,” Mr Hartzer said.
Westpac has already announced a series of reforms regarding financial advice, bank teller commissions and a ‘basic’ credit card.