The peak body for Australia’s banks has said the government must slow the “indecent haste” of its $6.2bn big bank tax plan or risk an escalating campaign against the policy.
At a media conference after the banks met Treasury officials on Thursday, the Australian Bankers Association chief executive, Anna Bligh, said the officials had failed to answer basic questions about the $6.2bn big bank tax, suggesting it was a rush job “cooked up” in the past week.
On Wednesday the treasurer, Scott Morrison, implored the five biggest banks not to pass on the $6.2bn tax to customers as two major banks signalled the need to share the pain with mortgage holders and shareholders.
Bligh said the banks had left the crisis meeting on Thursday morning in greater uncertainty because Treasury officials had been “unable to answer some very important and basic questions”.
Those included how the $6.2bn estimate was reached, which of their commercial activities would be captured, how the tax would affect transactions between the five banks and the Reserve Bank, and how that might impact the broader economy.
Bligh said the tax had been “rushed into the budget at the last minute” and it appeared that Treasury officials had also been left in the dark.
She said banks were unable to determine which parts of their activities would be subject to the tax and were “therefore unable to yet determine what it will mean for each bank”.
The former Labor premier-turned-bank lobbyist said the government was proceeding with “indecent haste” and had set a deadline of midday Monday for banks to put in a submission, which she called “almost impossible” to meet given the lack of detail.
Treasury officials had revealed a draft exposure bill would not be released for shareholders and investors to scrutinise before it was presented to parliament. They had also confirmed that banks would only get the draft legislation on Wednesday with a further 24 hours to respond, she said.
“This is circumventing the normal legislative processes of the Australian parliament,” Bligh said, adding that the lack of detail from officials suggested the levy had been inserted into the budget as recently as last week and she asked where the policy had been “cooked up”.
She warned the haste would cause “policy mistakes” to be made because it was “impossible” to determine the impact on customers, shareholders, the broader economy and Australia’s perception internationally.
“Banks are already getting questions from international markets about why they are being singled out for treatment like this from the Australian government,” she said, adding that those questions would “escalate”.
Bligh called on the government to “at the very least put this process on hold” to have detailed consultations with banks. The bank tax is due to apply from 1 July.
She said members of all political parties should be concerned and she would meet the government, crossbench and opposition to push the point.
Asked if the ABA would campaign against the government if it didn’t slow its timetable, Bligh said banks would “continue to raise their concerns” and felt “angry and insulted” by the process.
She did not rule out a mining tax-style ad campaign, saying banks “reserved the right” to prosecute their case in a number of ways and would consider the next steps when they had more details.
At the National Press Club on Wednesday, Morrison said banks could afford to pay the $1.5bn-a-year tax from their $30bn in profits, and asked them to absorb its cost without hitting customers.
Morrison said a company’s value was “the way it treats its customers”. “The banks want to send a message to their customers about how much they value them? Don’t do what they may be contemplating doing. Don’t do it.”
He told bankers that their customers “don’t like you very much” and invited them to “prove them wrong” by “ponying up” to fix the budget.
A Treasury spokesman said its officials had “outlined the technical legislative design of the major bank levy” at the meeting.
He said assumptions had been tested and feedback sought but “as is often the case, some technical issues were raised that will require further consideration over coming days”.
“The development of the levy was made in accordance with normal budget processes.”