SA Government’s bank tax faces High Court challenge by major banks

EXCLUSIVE: Australia’s major banks will mount a High Court challenge to the Weatherill Government’s proposed bank tax if it is passed by Parliament, and have warned other states considering a similar levy.

Treasurer Tom Koutsantonis during question time at Parliament. Picture: AAP

• Libs to block bank levy
• Galaxy poll finds businesses overwhelmingly against new bank tax
• Banks step up fight against proposed levy

AUSTRALIA’S major banks will mount a High Court challenge to the Weatherill Government’s proposed bank tax if it is passed by parliament, and have warned other states they will face the same fate if copycat taxes are flagged.

Australian Bankers’ Association chief executive Anna Bligh said the proposed tax — announced by Treasurer Tom Koutsantonis in the June Budget — was anti-jobs and was not in the best interests of South Australians.

“The South Australian Government will face a High Court challenge if it introduces its proposed bank tax,” Ms Bligh said.

“South Australia is a state that needs to create more jobs and encourage businesses to invest, not introduce new taxes.

“Banks are campaigning against the tax because it is not in the interests of South Australians, and they are prepared to fight it in court,” Ms Bligh said.

“Other states will also face a Constitutional challenge in the High Court if they propose to single out banks for new taxes.’’

Business SA on Monday released its latest Survey of Business Expectations, which showed that just 12.8 per cent of respondents believed the SA economy would strengthen over the next 12 months, compared to 30.8 per cent for the national economy.

Business SA chief executive Nigel McBride said employers were struggling as costs in the state escalated, and the bank tax threat raised further fears of an unstable regulatory environment.

“The survey results reflect concern about things like the Weatherill Government’s proposed bank tax, and small business owners strongly feel that they cannot afford to take another hit,” he said.

“Overheads are escalating because business conditions are worsening, profits are falling and there are genuine fears that conditions may well worsen.”

Mr McBride said the survey found businesses were pessimistic about the SA economy, but their confidence about the national economy had rebounded over the past three months.

“We need to grow confidence and improve economic conditions in this state, giving business owners a break,” Mr McBride said.

“That means cutting payroll tax, getting rid of the bank levy and ensuring State and Federal Governments collaborate on an energy plan which genuinely helps business owners to cut costs, so they can face their bills without fearing financial failure.”

Premier Jay Weatherill said Business SA should be “talking up” the state, rather than issuing warnings about skyrocketing costs for doing business.

Mr Weatherill said employers should be positive about his Government’s economic plans.

“Business SA should be spending its time talking up SA, not talking down SA,” he said.

“That should be its principal role. Businesses I speak to believe in a strong and positive future for the state, and they want their business organisations to actually be talking up SA.”

Mr Weatherill also took aim at Business SA for collaborating with the country’s big banks in an advertising campaign that was aimed at ensuring the bank tax was dumped.