The major banks should not use the implementation of the Major Bank Levy from 1 July as an excuse to increase costs and will be under the scrutiny of the Australian Competition and Consumer Commission (ACCC), according to the Federal Treasurer, Scott Morrison.
Noting that the legislation underpinning the implementation of the Bank Levy had passed both houses of Parliament, Morrison made clear that the Government hoped the banks would absorb the cost of the levy rather than pass it through to customers.
However, having succeeded in having the levy pass the Parliament, the Treasurer made it clear that the Government was not inclined to follow one of the recommendations of a Senate Economics Committee review of the Bill – that the impact of the legislation be assessed in two years.
“Implementation of the levy is not an excuse for applicable banks to increase costs for customers and the Government has directed the ACCC to undertake an inquiry into residential mortgage pricing,” Morrison said. “The consumer watchdog will be able to use its information-gathering powers to obtain and scrutinise documents from any bank affected by the levy and to report publicly on its findings.”
He said the Treasury had estimated the levy would raise around $6.2 billion in revenue over four years and added that, by reducing Australia’s largest banks’ funding cost advantages, the levy would also contribute to a more level playing field for smaller banks and non-bank competitors.
Commenting on the recommendations of the Senate committee for a two-year review of the levy, Morrison said he did not believe there was any need for such a move.