Major banks face bipartisan pincer
The major banks have found themselves the subject of a political pincer with the Federal Opposition having upped the ante on the Government’s proposed bank levy while continuing its demands for a Royal Commission.
The Federal Opposition leader, Bill Shorten used its Budget reply speech to not only back the imposition of a levy on the banks but to threaten a censure of the Prime Minister, Malcolm Turnbull and the Treasurer, Scott Morrison in the event that the banks sought to pass on the cost of the levy to customers.
At the same time, Shorten reinforced the message that a Labor Government would be pursuing a Royal Commission aimed directly at the banks.
The bi-partisan angst against the banks came as the Australian Bankers’ Association (ABA) left meetings with Treasury officials accusing the Government of “policy on the run” and of breaching normal Budget conventions.
It also came amid speculation that the banks would fund the ABA to run an anti-Government advertising campaign similar to that mounted by the mining industry against the Rudd Government’s mining tax.
Upon leaving a meeting with Treasury officials yesterday, ABA chief executive, Anna Bligh claimed the levy was “fraught with even more uncertainty after Treasury officials were unable to answer key questions at a briefing with banks”.
“Not only has the Government kept the banks and the public in the dark on this new tax, it is now clear that they have kept Treasury in the dark too,” Bligh said.
She said the bank representatives had left today’s meeting with more questions than answers, with more than 20 important issues that were unable to be addressed, including the basis on which Treasury calculated the $6.2bn estimate, how the new tax would affect transactions between the five banks and the Reserve Bank, and how that might impact the broader economy and which of the banks’ commercial activities would be captured by the tax.
“It is even more clear that this is policy on the run, playing fast and loose with the most critical sector of the Australian economy,” Bligh said. “Alarmingly Treasury officials also confirmed the Government was abandoning normal processes in preparing the legislation.”
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
