State Budget 2017: BankSA pulls plug on 150 jobs after putting processing centre plans on hold

BANKSA says it will put on hold a plan to open a new automated processing centre in Adelaide that would have created 150 jobs, blaming the State Government’s new bank tax.

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BANKSA says it will put on hold a plan to open a new backroom office in Adelaide that would have created 150 jobs, blaming the new bank tax.

Chief executive Nick Reade addressed the media on Friday afternoon, a day after labelling the State Budget’s new bank levy a “disgrace”.

Bank SA CEO Nick Reade. Picture: Mike Burton

Mr Reade, who has not yet spoken to Treasurer Tom Koutsantonis, said the automation centre could now possibly open interstate.

He also said the new levy would cost the company “tens of millions (of dollars)”.

“It would’ve been much better to have consultation,” he said.

“My phone has been ringing hot for the last 24 hours with business customers who are angry. They’re telling us that this is now a deterrent to investment. People will be thinking twice (about investing in SA).”

Mr Koutsantonis hit back almost immediately, labelling BankSA’s response as “hysterical behaviour” and questioning if the bank actually had plans to create the 150 jobs in South Australia.

“This is just threats ... a political stunt,” he said.

“This is the type of behaviour by banks that people hate.”

Mr Koutsantonis said he would not back down from the bank tax plan.

“It’s not coming off the table,” he said, adding that legislation to implement the change had been put to Parliament after he delivered the Budget on Thursday.

BankSA has 3800 staff, 800,000 customers and 38,000 local shareholders in the state.

Mr Reade said the bank had made “no decisions” about any further actions it may take as a result of the new tax. He did not rule out passing on costs to customers.

It forms part of the Westpac group, which has its second-largest number of employees in Adelaide, behind Sydney.

BankSA cancels sponsorship after tax hit

Earlier today, The Advertiser exclusively revealed BankSA had pulled its sponsorship of a post-Budget lunch, saying it “will not support the State Government’s Budget”.

The bank had committed to sponsor a pre-lunch VIP meet and greet before Friday’s SA Progressive Business lunch at the Convention Centre, but swiftly pulled its financial support following the announcement of Mr Koutsantonis’s bank tax — a carbon-copy of one imposed by the Federal Government.

SA Progressive Business is the fundraising arm of the South Australian Labor Party, which raises money in part by hosting expensive dinners and lunches where business leaders can get access to government ministers.

Mr Reade slammed the bank levy, which aims to raise $370 million over four years by replicating the Federal Government’s levy on the big banks.

It’s a sentiment which has been reflected by all of the major banks and industry organisations, and has raised the spectre of retaliatory measures including putting a brake on further investment in the state.

Mr Reade said late on Thursday: “Today’s announcement in SA is not only bad public and economic policy, it is not in the interests of South Australians. This distortionary policy could influence decisions banks make about investments in SA.

“We were disappointed by the Federal Government bank levy, but the SA proposal is double taxation and is a disgrace. The South Australian economy faces challenges but populism will not deliver the robust and sustainable economy South Australians deserve. As we have previously noted, there is no ‘magic pudding’.’’

At the Convention Centre, Labor ministers and supporters received a red-carpet welcome before being joined by Treasurer Tom Koutsantonis.

SA Progressive Business organisers confirmed they received a call at 6pm on Thursday night cancelling their position as a principal sponsor.

The Advertiser understands Bank SA had already paid for the sponsorship.

“We have a no-refund policy,” Mr Koutsantonis said, laughing.

“Bank SA are owned by Westpac and no doubt there bosses in Sydney told them to not come here today.

“That’s okay, it’s entirely up to them. I’m not surprised that Westpac are not turning up today, they don’t want to pay their fair share of tax.”

Mr Koutsantonis said the State Government’s new fight with the banks was no bigger than the one waged by the Coalition a few weeks ago, and that his speech at the lunch would reinforce to attendees that “this $200 million jobs fund is for them, for their benefit”.

“We want them to apply, we want them to go out and grow jobs, we want them to reinvest in SA,” he said.