SA Treasurer shrugs off High Court threat on bank tax plan

AUSTRALIA’S big banks will take the South Australian Government to the High Court if it goes ahead with plans to impose a new bank tax.

The Australian Bankers Association has also warned other states will face the same fate if they impose a similar levy.

But the threat has been labelled scare tactics by South Australian Treasurer Tom Koutsantonis.

“The South Australian Government will face a High Court challenge if it introduces its proposed bank tax,” association chief executive Anna Bligh said in a statement yesterday.

“Other states will also face a constitutional challenge in the High Court if they propose to single out banks for new taxes.”

Ms Bligh reiterated there was no justification for the tax because the banks “are already the nation’s largest taxpayers, contributing $ 14 billion in taxes last year”.

However, the SA Government, which hopes the tax will raise $ 370 million over four years, has rejected the threat as fearmongering.

The Treasurer is confident the proposed tax will hold up to any legal challenges and said the campaign was really about scaring other states.

“Our legal advice, which we sought before we announced the levy, is that we are on very solid ground,” Mr Koutsantonis said.

The SA Government’s controversial bank levy – which is similar to one announced by the Federal Government in this year’s budget – passed State Parliament’s Lower House earlier in August and is set to appear before the Upper House.