ABA: Bank tax policy process gone from ‘bad to worse’

ABA chief executive Anna Bligh has highlighted that the move prevents banks from consulting with the boards, customers and shareholders on the implications of the legislation, adding that the banks are “shocked” by the development.

“A bad tax has now become a secret tax,” Ms Bligh said.

“The government is going to extraordinary lengths to keep this tax hidden from the people, who will be most affected by it, and from the public.

“How can Australia’s major banks determine the impacts of this legislation if their senior staff and analysts are in danger of being prosecuted if they speak to stakeholders, the public or the media?

“A totally unacceptable public policy process has today gone from bad to worse.”

Ms Bligh opined that the new tax, which is expected to raise more than $6 billion over the next four years, will have “profound” effects on banks, as well as their customers.

“The government has now made it illegal for the bill to be tested in the public sphere.

“This is likely to lead to highly flawed legislation, and further risks unintended consequences on the economy and financial system,” Ms Bligh said.

Ms Bligh’s comments came after she wrote to Scott Morrison MP earlier this week, asking that he immediately release Treasury modelling of the tax, which was announced in the federal budget earlier in the month.

In her letter, she insisted that it was “no longer acceptable” to keep the banks or the Australian community “in the dark” about the tax, which she believes would have a major impact on all sections of the Australian economy.

“Senior executives of the major banks in good faith attended what they expected to be a comprehensive briefing from Treasury, only to find to their dismay that Treasury was also in the dark,” she said at the time.

“Fundamental questions about how this tax has been calculated and how the $6.2 billion figure was reached have not been answered. Yet the Treasurer Mr Morrison continues to maintain that this tax will be ready for implementation by 1 July, which is only around six weeks away.

“The major banks are terribly concerned about the risk of major unintended consequences of this new tax, and there is an urgent need for more detailed information so we can properly assess its impacts.”

[Related: Majors tipped to hike home loan rates over levy]