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New bank tax – a letter to our shareholders

In response to the new bank tax announced in the Federal budget, Westpac has updated the market with an ASX announcement and also issued a letter to all Westpac shareholders outlining what this tax will mean for their company.

The letter was sent directly to shareholders and also lodged with the ASX, and explains what has happened with this new announcement. The letter also covers the reasons Westpac is vigorously opposed to the new tax and the potential impacts based on the limited detail available at this stage.

Some key points noted in the letter:

  • This is an inefficient tax, that targets just five companies who are already among the largest taxpayers in Australia (Westpac is Australia’s second largest taxpayer);
  • The tax does not apply to foreign banks, giving them a competitive advantage and benefitting foreign shareholders over Australian ones;
  • No company can simply ‘absorb’ a new tax—the impact of higher costs ultimately flow through either to customers, shareholders, suppliers, staff, or some combination of all four. We’ve attempted to quantify what those impacts could be.

The full letter can be viewed here (PDF 195KB)
Read the ASX Release here