TAIPEI: BankSA has put a plan to create 150 jobs on hold in response to South Australia’s new bank tax but Treasurer Tom Koutsantonis says he won’t walk away from the budget measure. As the fallout from the new levy gathers pace, BankSA chief executive Nick Reade has labelled the impost a disgrace.
He says a plan to create a new backroom processing centre has been put on hold and there is a real chance the expansion will now move interstate. But Mr Koutsantonis fired back, calling the bank’s response a political stunt.
“These banks are making super profits yet every year they close more branches, they charge us more fees and they make more profits,” he said.
“All of a sudden, the moment governments want them to pay their fair share of tax, they start claiming they’re not going to hire people.”
The new tax was announced in Thursday’s state budget and is expected to raise $370 million over four years.
It has prompted a chorus of criticism from the banks and business groups, who believe it will discourage investment, with analysts also warning it will lead to higher mortgage rates in SA. The levy will apply from July 1 and slugs the same institutions – Westpac, CBA, NAB and ANZ – to be hit by the federal government’s tax.
BankSA will not be directly affected but is part of the Westpac group. The banks will be charged a quarterly levy of 1.5 basis points or 0.015 per cent on bonds and deposits of more than $250,000.
Banks could move to challenge the new measure in court but Mr Koutsantonis said the government had already taken legal advice and believed it was on solid ground with both its levy and the legislation to prevent banks from passing the tax on to customers. That legislation was also introduced in state parliament on Thursday.
“Our legal advice is that we’re on firm ground,” he said.
“We’ll pass our legislation and levy and if they want to take legal action against us, they can.” The Australian Bankers’ Association described the SA levy as a “desperate political move” while the Business Council of Australia said the tax exposed a government unable to get its own budget and spending under control.
The Western Australian Labor government said the idea of a bank levy was an attractive option. The NSW government has ruled out following SA’s lead.
