BIG banks are set for a showdown with Treasury officials over the $6.2 billion levy introduced in the federal budget as Scott Morrison insists he’s “not having a war” with financial institutions.
Speaking to Fran Kelly on ABC’s Radio National on Thursday, Mr Morrison didn’t shy away from criticism the levy was being referred to as a “tax”.
“Call it a tax, call it a levy. We’re levying, taxing the banks on their liabilities … and this provides a permanent and structural position for the revenue permanently,” he said.
The Treasurer said he believed banks should absorb the levy after warning against passing on costs to customers.
“They absorb costs every day Fran … if they’re telling me $1.5 billion can’t be found to do their bit … I don’t accept that argument,” he said.
Treasury officials are set to brief bankers in Sydney today.
Mr Morrison on Wednesday urged bankers to “pony up” and not pass on the costs to customers.
Chief executives of Commonwealth Bank, National Australia Bank, ANZ and Westpac all labelled Mr Morrison’s levy a “bank tax”, with three of the four explicitly saying the cost will be passed on.
Former prime minister John Howard also called it a tax.
Finance Minister Mathias Cormann said he wouldn’t be drawn into a debate on “semantics”.
“It is designed in a way to ensure that the banks do not have to pass it on to their customers, it specifically excludes from its base day-to-day bank accounts and day-to-day mortgage accounts,” Senator Cormann told ABC Radio on Wednesday night.
NAB chief executive Andrew Thorburn said it is not possible to impose a tax without an impact on people.
Westpac chief executive Brian Hartzer and Commonwealth Bank chief executive Ian Narev both warned in statements that any new tax will ultimately be borne by customers, shareholders, and employees.
Qantas CEO Alan Joyce said surprises and uncertainty are not good for business, as he warned against making Australia less competitive.
“What’s important is that we have all of our industries, all of our businesses being competitive. That they have certainty about policy,” he told ABC radio on Thursday.
As the boss of a company which has other corporations as customers, Mr Joyce said he wanted to see others continue to grow and do well.
The Australian Competition and Consumer Commission will be asked to monitor the banks’ response when the levy is implemented.
Originally published as ‘I’m not having a war with the banks’