The major bank levy proposed in the 2017 Federal Budget requires the Government to release analysis of its impact on the broader economy, even while its “truncated implementation timeframe” goes against a recommendation in the Financial System Inquiry (FSI).
Those were some of the arguments put forward by the Australian Bankers’ Association, which expressed significant concern that a thorough regulatory impact statement (RIS) would not be undertaken as part of the introduction of the bank levy.
In a submission lodged to the Treasury on Monday, the ABA argued the bank levy failed to meet the criteria for an exemption from the requirement to product a RIS.
ABA chief executive, Anna Bligh said: “Under the Government’s own guide to regulation, only the Prime Minister can exempt a government entity from the need to complete a RIS, and we urge Prime Minister Turnbull not to do this”.
The submission also said the tax ignored the Government’s own best practice guidelines.
“The Government has failed to meet its own criteria around transparency and accountability in decisions, evidence-based policy development, and effective administration of regulation,” Bligh said.
The ABA referenced overseas examples such as Austria and the UK, which were subject to similar taxes to suggest coordinated consultation between all affected regulators including Australian Prudential Regulation Authority (APRA), Australian Securities and Investments Commission (ASIC), the Australian Office of Financial Management, and the Reserve Bank of Australia (RBA) along with Treasury and the five banks.
The ABA has also asked Treasury for a longer consultation period, suggesting four weeks to examine and respond to the Treasury analysis, draft legislation and explanatory memorandum, arguing this was reasonable given the complexity of the levy.
The five banks would have 24 hours to comment on the draft legislation on 17 May before it would be finalised on 18 May, but the ABA believes further consultation was possible given the tax would be levied for the first time on 30 September, although it applies from 1 July.
