SA State Budget 17: Bank bosses label Treasurer Tom Koutsantonsis’ new levy on liabilities a ‘disgrace’

THE boss of BankSA has labelled the State Government’s $370m bank tax a “disgrace”, while other industry leaders have warned of the damage it will do to SA’s reputation as a place to invest.

THE boss of BankSA has labelled the State Government’s $370 million bank tax a “disgrace”, while other industry leaders have warned of the damage it will do to South Australia’s reputation as a place to invest.

“The SA economy faces challenges but populism will not deliver the robust and sustainable economy South Australians deserve,” Nick Reade said shortly after Treasurer Tom Koutsantonis unveiled the tax grab.

“The announcement in SA is not only bad public and economic policy, it is not in the interests of South Australians.

“We were disappointed by the Federal Government bank levy, but the SA proposal is double taxation and is a disgrace.”

Unsurprisingly, Mr Reade was not the only industry figure to come out fighting against the new tax, which mirrors the recent Federal Government move against Australia’s big five banks — Commonwealth, ANZ, Westpac, NAB and Macquarie.

BankSA forms part of the Westpac Group.

Australian Bankers’ Association chief executive and former Queensland Labor premier Anna Bligh said the policy was a “desperate political move”.

She said every premier and first minister across the country would now be called on to rule out a similar tax.

“Let me be clear — it is not the job of banks to prop up government budget shortfalls,” she said.

“The announcement is the worst possible signal to the business community in SA and will make SA less competitive, potentially driving jobs to other states.

“Tax policy in Australia is now becoming a joke at the whim of political opportunism and SA is trying to impose triple dipping for bank taxation.”

ANZ boss Shayne Elliott described the tax as “deeply concerning” and one that “will likely impact business investment in SA at a time when its economy is struggling with low growth, low business confidence and high unemployment”.

“SA does not need another drag on its economy after the repeated power failures over the last few years,” he said.

“Given its issues they would be wise to be more welcoming of both investment and capital.”

Mr Elliott said Mr Koutsantonis clearly lacked an understanding of the role banking plays in supporting the SA economy and the damage that “opportunistic and ill-considered cash grabs will have on the long term economic prospects of the state”.

A spokesman for NAB said the levy, which is expected to raise about $90 million per year, was “poor policy without logic” and introduced to “cover their own budget shortfalls”.

“South Australians want their state to be more attractive to investment that will enable it to transition its economy and create new opportunities and jobs — this tax will do the opposite,” he said.

Professor Sinclair Davidson from the Institute of Public Affairs, a Melbourne-based conservative think tank, said the policy was “precisely the sort of state-based nuisance tax that the GST was brought in to eliminate”.