Australia's largest banks believe the incoming $1.6 billion bank levy burden should be shared with foreign banks and multi-national corporations.
The government's proposed bank levy has been labelled unfair by the big five banks and has customers fearing it will end up being passed on to them. The banks being targeted are ANZ, Westpac, NAB, Commonwealth Bank and Macquarie Bank.
The 0.06 percent tax will generate approximately $1.6 billion for the government each year from the five banks meaning each of them will need to pay approximately $230 million.
Most Profitable
While $1.6 billion is a substantial sum, the profits of the five banks added up to $31 billion in 2016. Figures that make Australia's banks the second-most profitable in the world.
The banks have been vociferous with their objections saying they will need to pass on the proposed levy to their customers. ANZ chief executive Shayne Elliott went as far to call the new levy «populist bank bashing.»
The government disagrees and firmly believes the banks can afford to absorb the levy and is also about to bring in other checks and balances.
Foreign Banks Exempt
Australian Bankers' Association chief executive and former Queensland premier, Anna Bligh is of the opinion that it should be the multi-nationals who are targeted and not Australia's banks, and is now engaged in a war of words with the government over the coming legislation.
Foreign banks are exempt from the new levy, which has upset the domestic lenders
«I think most Australians have an idea about fairness and I don't think they think that our banks should be singled out, as opposed to the big multi-national companies here who pay no tax at all,» said Bligh.
The new levy is yet to pass Parliament but is scheduled to take effect from July 1.
