BANKING ON AD TAX ATTACKS
Mining- style fight on the cards
AUSTRALIA’S major banks are threatening a full- scale “mining tax” style campaign over the Turnbull Government’s proposed $ 6.2 billion levy, condemning the plan’s “indecent haste” and “almost impossible” lack of detail.
But it can today be revealed that despite crying poor, the big four banks have reaped a staggering $ 3 billion in extra profits through out- of- cycle interest rates hikes in the last 18 months alone.
An analysis of Australian Prudential Regulation Authority figures show Westpac, whose chief executive Brian Hartzer was paid $ 6.7 million last year, almost collected an extra $ 977 million – just shy of $ 1 billion in rates revenue.
The Commonwealth Bank collected $ 759 million, followed by National Australia Bank at $ 736 million and ANZ at $ 556 million. That’s because, while the Reserve Bank has cut the official rate by 0.05 per cent since November 2015, most variable rates across the big banks have fallen just 0.015 per cent.
NAB boss Andrew Thorburn, who was also paid $ 6.7 million last year, warned that the cost of the new levy announced by Treasurer Scott Morrison would be passed to customers through higher fees or rates.
“It’s got to be borne by customers or shareholders and maybe staff, that’s the only three groups that we can work with,” Mr Thorburn told 3AW.
When asked if the banks would mount a mining taxstyle ad campaign against the tax, Australian Bankers’ Association chief executive Anna Bligh said the banks would “reserve the right to continue to prosecute this issue in a number of ways”.
“Obviously they will continue to make public statements they feel very concerned about,” she said.
“Where the campaign goes after that is something the banks will consider when they have a better idea, frankly, what this means for them and their customers.”
Former Liberal campaign strategist Toby Ralph said banks were “one of the few groups people hated even more than politicians”, but an advertising campaign could work.
“It would cost $ 20 million and that’s money down the back of a sofa to a bank – and it could save them $ 6.5 billion so it’s a pretty good return on investment,” he said.
After a meeting between officials and bankers, Ms Bligh said bankers were insulted by the haste of the tax decision and that it was “even more clear that this is policy on the run, playing fast and loose with the most critical sector of the Australian economy”.
But Mr Morrison derided the banks’ confusion.
“I’m not going to go into a repeat of the internals of that discussion, other than to say, one of the big asks they turned up with today is, ‘ could we pay less tax’,” he said.