Tom Koutsantonis, Steven Marshall and Simon Beheny explain their positions for and against the abandoned bank tax

THE State Government has abandoned its controversial bank tax, succumbing to an intense campaign waged by banks, business and the Liberal Party. Three key players take up the case for and against the tax.

• Weatherill kills off bank tax
• Upper House rejects South Australian bank tax
• Big banks’ blunder over $370m state bank tax

• BELOW — OPPOSITION: Nobody fooled by ploy

• BELOW — IPA: Everyone would have paid

CREATING JOBS WAS ALWAYS THE PRIORITY

By TOM KOUTSANTONIS

BY blocking the State Government’s major bank levy, Liberal Leader Steven Marshall chose to support five east coast banks over South Australian small businesses.

In doing so, he stood up for companies like NAB, who recently announced it was sacking 6000 workers, on the same day as it announced a $6 billion profit.

Treasurer Tom Koutsantonis

It was an incredible capitulation to powerful vested interests, but unfortunately that is what we have come to expect from Steven Marshall.

It should be remembered that Steven Marshall announced in a media conference in June that he would support the passage of the Budget, but changed his position after one meeting with a bank CEO. He has also said he opposed the Federal Government’s major bank levy, but Steven Marshall kept his views secret to protect his masters in Canberra.

The Government’s number one priority remains job creation. The major bank levy was forecast to raise more than $400 million over four years and was designed to help fund a range of job creation measures. Those measures include payroll tax cuts of almost $10,000 for small businesses, the $200 million Future Jobs Fund, the expansion of the Job Accelerator Grant program to help apprentices secure work, and housing incentives of up to $25,500.

If you want to spend money to create jobs, you need to find a way to pay for it, and rather than increase taxes on South Australians, we chose to make that ask of the big banks, which are undertaxed by about $4 billion every year.

In response to this request to pay their fair share of tax, the banks spent millions on a smear campaign to protect their profits, pushing false information about our economy that has been proved wrong by their own reports.

This week, NAB reported that business confidence in South Australia is the highest in the nation. South Australia’s unemployment rate has also fallen, and we have seen a plethora of major Australian and international companies investing billions in our state in recent months, including BHP, OZ Minerals, GFG Alliance, Solar Reserve, Tesla and Neoen.

We’ve also had an overwhelming response to the $200 million Future Jobs Fund, with local businesses seeking support to create thousands of jobs in the industries of the future; energy and mining, shipbuilding and defence, tourism, food and wine, IT, high tech manufacturing, and health industries.

And small business is doing their bit too, creating 14,000 new jobs with the help of Job Accelerator grants of up to $15,000.

These job creation programs followed dramatic tax reforms in which the State Government announced the abolition of a range of transactional taxes and changes to the return to work levy that save businesses more than $200 million a year.

Funding jobs initiatives such as payroll tax cuts and housing incentives will be difficult as a result of the actions of the Liberals to block bank levy, and the State Government will need to go away and reformulate our Budget and the measures within it.

Jobs, however, remain the Government’s number one priority and we will work hard to ensure South Australia’s economy continues to perform ahead of trend.

NOBODY FOOLED BY CYNICAL PLOY

By Steven Marshall

THE death of Jay Weatherill’s state bank tax is a great victory for every South Australian household, every South Australian business, and the future prosperity of our state.

Labor’s state bank tax would have driven investment and jobs out of South Australia and trashed business confidence right at the very moment businesses need certainty and our state desperately needs to attract investors.

Opposition Leader Steven Marshall

With 150,000 South Australians searching for a job or for more hours at work we need to make business — small, medium and large — the engine room of that employment growth.

I’ve lost count of the small businesses and homeowners struggling with bills who urged me to stand firm in my opposition to this massive new tax.

South Australians recognised that at the end of day they were going to foot the bill for Jay Weatherill’s latest tax grab.

South Australians have already been hit with Jay Weatherill’s 200 per cent hike in the Emergency Services Levy and were in no mood to back another massive tax take.

The fact Jay Weatherill thought South Australians could absorb the impact of his further $410 million tax grab highlights just how far out of touch Labor has become during 16 years in government.

It takes a special combination of arrogance and cynicism to propose increased taxes when at the same time the Premier is wasting millions of taxpayers’ dollars on political advertising for the sole purpose of saving his job.

Of course this is the same Premier who went to the last state election claiming only he could save South Australia from an increase in the GST only to insist later that the rate of the GST rise by 50 per cent.

The same Premier who opposed the nuclear industry before the last election and then wanted to make South Australia the world’s nuclear waste dump after it.

It’s the same Labor Government that was “never, ever” going to close the Repat.

Not to mention create 100,000 new jobs in six years.

South Australians are tired of Labor’s games and just want an honest government that has a plan to create more jobs and reduce the cost of living.

The revival of South Australia’s economic fortunes won’t be achieved by more taxes leaching more money out of household and business budgets.

I can assure the people of South Australia that a Marshall Liberal Government will deliver lower taxes to help stimulate our state’s struggling economy.

I’m going to back South Australian businesses and households by removing the shackles Labor has bound them in.

I’m going to let South Australians decide where they should spend more of their hard earned wages. I have no doubt that Labor thought they had hit on a political masterstroke with their state bank tax.

South Australians never bought Jay Weatherill’s story that they wouldn’t have to pay this new tax.

The people of South Australia can spot a political ploy and they saw the Premier coming from a long way off.

EVERYONE WOULD HAVE PAID COST

■ By Simon Breheny

SOUTH Australians can breathe a sigh of relief today after the State Government declared its bank tax ‘dead’. If any state economy needs lower taxes, less red tape and a more competitive free enterprise environment, it’s South Australia.

Well done to the Liberal Party, Australian Conservatives and Advance SA MPs for standing up for SA at a time when this state desperately needs champions.

Simon Breheny

The government’s new tax was a tax on every South Australian, not just the banks.

If you have a home loan, this tax would have affected you.

If you own a business, this tax would have affected you.

That’s because governments can’t impose taxes for free. Labor said the bank tax would raise $370 million. And that money has to come from somewhere. There’s no such thing as a business ‘absorbing’ costs. Someone always pays. Most likely the costs would have been passed onto consumers. If you’re a bank customer that means you.

But even if the banks chose not to increase fees someone else has to pay. The banks could have cut wages for their employees instead. But that’s difficult too.

Banks operate in a competitive labour market, and they’re constantly trying to attract talent from elsewhere in Australia and overseas.

The only other option they have is to reduce dividends to shareholders. And guess what? Because of compulsory superannuation it’s likely you own Australian bank shares via your super fund.

This is why the best way for governments to raise revenue is to grow the economy. A growing economy means more jobs, higher incomes, and more money in the government’s coffers. When it comes to taxes, there ain’t no such thing as a free lunch.

Instead of raising taxes, the government should be doing everything it can to cut taxes and cut red tape.

■ Simon Breheny is Director of Policy, Institute of Public Affairs