A new bank levy has been announced in Australia’s budget, although there have been warnings it will be passed on to bank customers.
The levy on Australia’s biggest banks, including Commonwealth Bank, Westpac, National Australia Bank, ANZ and Macquarie, would raise billions of dollars in fees, and there will also be higher fines for executives who breach misconduct laws.
The new tax will be levied on the borrowing that banks use to fund their lending, including corporate bonds and large deposits, but it will not affect shareholders’ capital and smaller deposits.
If it passes parliament, the levy is forecast to raise approximately $A1.5 billion per year over the next four years.
Australian Bankers’ Association chief executive Anna Bligh said the new tax would be bad economic growth.
“This new tax is a direct attack on jobs and growth, not just a tax on the five largest banks,” Ms Bligh said.
“It is a tax that will hit Australians by hurting investment and could have unintended consequences.
Bigger penalties for bankers behaving badly
A new Banking Executive Accountability Regime will compel all senior bank bosses to be registered with the Australian Prudential Regulation Authority.
If found to be in breach of their obligations under the regime, executives can be delisted from the register, barred from holding executive roles and even stripped of their pay bonuses, which often make up a majority of their remuneration.
And if banks breached misconduct rules they would face bigger fines, starting at $50 million for small banks and $200 million for large institutions.