The major banks have reacted angrily against the Government’s Budget proposal to impose a bank levy, with the Australian Bankers Association (ABA) declaring there was no consultation on the issue.
ABA chief executive, Anna Bligh described the levy as "a direct attack on jobs and growth, not just a tax on the five largest banks".
"It is a tax that will hit Australians by hurting investment and could have unintended consequences," she said. "Contrary to the Government’s claim that the tax will only be levied on banking liabilities, the reality is that it will affect the entire banking system."
"This new tax is not a well thought out policy response to a public interest issue, it is a political tax grab to cover a budget black hole," Bligh said. "It is naïve and misguided and has already sent the wrong signals to global financial markets about the strength and stability of our banking sector. Market speculation about this new tax just today stripped around $14 billion from the value of life savings and superannuation accounts of ordinary Australians after bank shares plummeted."
Bligh said it was particularly disappointing there had been no consultation with industry about the new tax stating that in a period in which there had never been more consultation between Government and banks on a wide range of issues, "on this issue there has been none".