Tag: The Bank Tax

ABA Ups The Ante On SA Bank Tax

 

The Australian Bankers’ Association’s new website – jobsnottaxes.com.au – launched today, invites the people of South Australia to email local members of Parliament to take a stand against the tax.

“South Australia needs jobs to grow its economy, not new taxes that will undermine this objective,” ABA Chief Executive Anna Bligh said.

“Over the past 10 years, full time jobs in South Australia grew by an average of 0.2 per cent per year, compared with 0.9 per cent across Australia.”

A new statewide Galaxy poll (Galaxy surveyed 801 people in South Australia between 8 – 12 September 2017 via telephone and online) conducted this month shows that 52 per cent of South Australians oppose the tax compared with only 38 per cent who support it. Half of people surveyed believe the tax would negatively impact on jobs in the state.

The website also features new television ads with members of the South Australian community urging the Government to dump the tax and focus on jobs and growth.

 

“In 2016, the five banks impacted by the proposed tax paid around $1.5 billion in dividends to shareholders in South Australia and lent $10 billion to South Australians to buy their own home,” Ms Bligh said.

“This is a tax on all South Australians and will impact shareholders, customers and bank employees,” she said.

 

 

We are not a major bank: Macquarie

From Australian Broker.

Macquarie has decried its inclusion in the government’s bank levy, in a statement stressing its minor market share and low ranking in Australia’s banking ecosystem.

The comments come from the group’s submission to the Senate Economics Legislation Committee which held a hearing with the Australian Bankers’ Association (ABA), the big four banks, Macquarie, ME, Bendigo and Adelaide Bank and the Customer Owned Banking Association (COBA) on Friday (16 June).

The levy will have a “disproportionate impact” on Macquarie Bank, chief financial officer Patrick Upfold wrote in the submission paper.

“Macquarie Bank is not a ‘major bank’,” he said. “Macquarie Bank is predominantly a wholesale business and exporter of financial services.”

While the purpose of the levy has allegedly been to provide a more even playing field in a market where the five affected banks represent 80% of all credit provided, Upfold said that by itself Macquarie held less than 2% of total lending and advances in Australia.

“Putting this into perspective, Macquarie Bank’s Australian mortgage business is not the fifth largest in Australia but eighth, ranking behind ING, Suncorp and Bendigo Bank and just ahead of Bank of Queensland.”

The levy will increase the effective tax rate on the bank from 34% to 41% which was well above the 30% company tax rate, Upfold said.

“We remain surprised the Major Bank Levy applies to Macquarie Bank given our size, the benefit we bring to competition in the domestic retail market and the role we play in bringing export income into the Australian economy.”

Macquarie also suggested a number of changes to the levy including increasing the threshold level for banks to be eligible.

“The levy threshold has been set high enough to exclude regional banks whose domestic presence is larger than Macquarie Bank’s but low enough to ensure Macquarie Bank’s inclusion,” Upfold said.

“To achieve the stated objective of improving competition in the domestic retail market and to ensure Macquarie’s continued success in exporting financial services globally, the threshold should be raised to exclude Macquarie Bank.”

ASIC and AFP investigating bank levy leak

From Investor Daily.

The corporate regulator is working with the Australian Federal Police on an investigation into “suspicious trading” of major bank shares ahead of the announcement of the new bank levy in May’s federal budget.

ASIC officials confirmed to the Senate joint committee members on Friday that the regulator is conducting an inquiry into “suspicious trading” in conjunction with an AFP investigation into the leak of the bank levy prior to the release of the budget on 9 May.

In response to a question from Labor Senator and committee deputy chair Deborah O’Neill, ASIC commissioner Cathie Armour said the regulator is looking at trading in days before the release of the federal budget.

“As you can imagine, there is a high volume of activity in those stocks so it’s not a straightforward exercise,” Ms Armour said.

“We are working together with the AFP and considering whether there was any information that was inappropriately shared with third parties before the announcement.”

However, while ASIC is “making inquiries”, there is no formal investigation underway as yet, according to ASIC senior executive leader for markets enforcement Sharon Concisom.

Ms Concisom said the ASIC investigation has included interviews, but has not resulted in the issuance of Section 19 notices, which compel people to co-operate with ASIC.

Such notices would require a formal investigation, which is not yet underway, she said.

ASIC chairman Greg Medcraft said it was important that the general public understood the regulator is looking into the matter seriously.

Mr Medcraft encouraged people with knowledge of the leaks to volunteer the information to the regulator.

“Come to us before we come to you,” warned Mr Medcraft.