Super concern played down
THE head of investment at Australia’s biggest superannuation fund has called for calm in the debate over the forthcoming bank tax, saying the impost will not savage super returns.
AustralianSuper chief investment officer Mark Delaney says his view of the big banks has “not changed much” and they have an appropriate weighting in the fund’s portfolios. The Commonwealth Bank, Westpac, National Australia Bank, ANZ and Macquarie will all be hit by the tax, which was unveiled with the federal Budget last week. It will not apply to smaller banks.
While banks are dominant fixtures of the Australian sharemarket, Mr Delaney noted only a quarter of AustralianSuper’s Balanced fund was devoted to domestic equities.
With a total pool for that fund of $83 billion, about $20 billion is invested in Australian stocks, with $8 billion of that in the big four banks and Macquarie.
AustralianSuper holds between 1.5 per cent and 2.4 per cent of the stock issued by each of the five lenders.
Mr Delaney cautioned there was still a lack of clarity about the likely impact of the tax and how it was “going to be managed”. “And so it may be too early to work out if it will meaningfully impact bank earnings,” he said.
But he noted there were many other variables that would ultimately affect the performance of the industry, such as interest rate changes, and the broader market. “There are lots of different fac-
“It may be too early to work out if it will ... impact bank earnings AUSTRALIANSUPER’S MARK DELANEY
tors which drive returns. There are global political factors (and) economic cycles,” he said.
His comments come as the big banks continue a ferocious campaign against the tax, putting them at odds with their smaller counterparts, who have backed it.
Bendigo and Adelaide Bank, Suncorp and ME, which is part owned by AustralianSuper, are among smaller banks that will not have to pay the tax.
The big banks had until yesterday morning to respond to the government’s draft legislation for the so-called liabilities levy, which is aimed at raising $6.2 billion over four years. It is due to start on July 1.
In a statement yesterday, industry lobby group the Australian Bankers’ Association said the banks had met Treasury’s “tight timeframe to lodge their submissions”.
“It is now time for the government to reveal when it will release the legislation to the public – after all, this tax will affect millions of Australians who own shares in banks or are bank customers,” ABA chief Anna Bligh said.