The Australian Bankers’ Association has responded to statements by the Western Australian Treasurer threatening the re-emergence of the controversial bank levy.
The decision on whether to implement the bank levy within WA will rely on the Federal Government’s response to the Productivity Commission’s inquiry into competition in the banking industry, said Treasurer Ben Wyatt
“The state got rid of its bank taxes as part of the GST deal. But if the GST system isn’t working, then we will have to look at a bank levy,” he said.
ABA chief executive Anna Bligh expressed her disappointment that the WA government was seeking to target one industry in its attempt to restore the state’s budget.
“Bank customers and shareholders should not be held to ransom in political brinkmanship between WA and Canberra,” she said.
There were some unintended consequences from the current system in allocating GST, she added, saying the Treasurer was right to question why WA only received a GST share of less than 35 cents to the dollar.
“But a new tax on banks is not the answer. It is short-term political thinking that will cause long-term economic damage.
“Banks are already the largest corporate taxpayers in the country and contribute significantly to the WA Budget through payroll tax.”
She concluded, saying that banks drive economic activity in WA through loans to both individuals and small businesses.
“WA needs to grow its economy and create jobs, not introduce new taxes,” Bligh said.
