Australian conservative government to raise taxes on five biggest banks

Australian conservative government to raise taxes on five biggest banks

The tax is set to raise 6.2 Billion Australian Dollars over a four year period and is supported by the opposition Labor Party, unsurprisingly as the idea was borrowed from them in the first place. "In addition, global jurisdictions that apply measures such as this already have much lower corporate tax rates than Australia - for example, in the United Kingdom the corporate tax rate is 20 per cent".

Despite a pre-budget push for the government to come to the table on legislating maximum payment times, there were no formal efforts in the budget papers to tackle the impact of late payments on smaller suppliers.

Treasurer, Scott Morrison said the funding would be made available through the Public Service Modernisation Fund and would ensure the continuing development and delivery of online initiatives, education programs and new exhibitions, including the use of new technologies to extend the reach of cultural heritage and creative touring programs.

He cautioned the so-called Big Five - Commonwealth Bank, Westpac Banking, Australia and New Zealand Banking, National Australia Bank Ltd and Macquarie Group Ltd - against passing the costs on to consumers.

"Do you really want that person [the regulator] being not only a reviewer of a very important part of the financial system, but also a rule maker in these sorts of issues? We could all potentially be recipients of this scheme".

The biggest loser from Tuesday's budget was the nation's banking sector, which has already been subjected to a series of scandals and parliamentiary inquiries in recent months. Westpac said the financial impact of the levy was not immediately clear while representatives of CBA and NAB declined to comment.

That equates to $6.2 billion of new taxes from the banking sector over the next four years. The measure excludes deposits of less than $250,000.

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Mr Morrison warned the banks not to put up fees to cope with this new tax during an address at the National Press Club in Canberra on Wednesday.

Media outlets typically produce guides about the "winners and losers" in a government's budget.

"If in breach, they can be deregistered and disqualified from holding executive positions, and be stripped of their significant bonuses", the Treasurer said.

The measure has also been criticized by the individual banks affected. "We are not sending lawyers around the country for three years, we are acting now", the Treasurer said, in reference to a royal commission.

Australian Bankers Association chief Anna Bligh said there is no doubt the policy was rushed into the budget at the last minute as a "smash-and-grab" for more revenue.

Council of Small Business Australia (COSBOA) chief executive Peter Strong says commitments to infrastructure spending and red tape reduction can only help small businesses conditions, and overall, he thinks the budget has a lot to offer SMEs.

Ms Bligh called on the Senate to carefully scrutinise the proposed law underpinning the tax, potentially delaying its July 1 introduction.

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