Bank Tax Now Law

The Senate Inquiry on the Bank Tax reported yesterday.  Subject to consideration of the other recommendations, the committee
recommends that the bills be passed. It was, last night.

Recommendation 1 – The committee recommends a review be conducted by the Senate Economics Legislation Committee in a minimum of two years to examine:

  • the efficacy of the policy in fulfilling its stated objectives;
  • the effect on competition in the Australian banking market; and
  • whether the levy is required in perpetuity, including the need for a further review at the time the stated objective of the levy is achieved; that is when the budget has been ‘repaired’.

Recommendation 2 – The committee recommends that Treasury closely examine issues relating to the technical aspects of the bills to determine if changes are required to avoid double taxation and/or to narrow the liability base.

Recommendation 3 – The committee recommends that Treasury provide greater explanation as to the rationale for the method of liability calculation which presently excludes foreign banks, and specifically provide an explanation as to why Macquarie Bank is subject to the levy while foreign based competitors are not.

Recommendation 4 – The committee recommends that the legislation be amended so that the Treasurer may, on the advice of APRA, suspend the application of the levy to any or all Authorised Deposit-taking Institutions in extreme financial or economic circumstances.

Recommendation 5 – Subject to consideration of the other recommendations, the committee recommends that the bills be passed.

Within the 30 page report, we found the comparative table on bank levys most interesting.

 

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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