Banks forced to pay $120 million tax bill to give their own watchdog more bite
THE big banks will be slugged with a $120m tax bill to pay for a beefed-up financial watchdog that will crack down on banking scandals and corporate crime.
NSW
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THE big banks will be slugged with a $120 million tax bill to pay for a beefed-up financial watchdog that will crack down on banking scandals and corporate crime.
As part of the new tough stance by the Turnbull government, Treasurer Scott Morrison will today announce a raft of measures, including a special prosecutor to pursue any banks that step out of line.
The Daily Telegraph can reveal that federal Cabinet has approved a major crackdown on the banks, including an increase in the multimillion-dollar annual levies they have to pay.
This means the lenders will be forced to pay for their industry to be policed, rather than taxpayers who have already had to wear the brunt of the banks’ misconduct.
The Australian Securities & Investments Commission will also be given exemptions from the Public Service Act, allowing it to hire top-shelf IT technicians trained in sophisticated electronic surveillance.
The consumer banking cop, the Financial Services Ombudsman, will also be backed with new legislation to give it greater powers to take on complaint cases against the banks from mum and dad investors, mortgage holders and small business owners who have been ripped off.
Mr Morrison will today announce the government’s response to a nine-month review of the operations of ASIC. The centrepiece of the response will include the appointment of an additional commissioner to ASIC, who would take sole responsibility for prosecutions in the banking sector.
Companies will be hit with higher annual levies of $30 million a year to fund the regulator.
The “user pays” system will restore more than $120 million to ASIC over the next four years — funding that was cut by the former Abbott and Gillard governments.
Over time, the new system will result in full cost recovery for the regulator, estimated to be close to half a billion dollars.
“These are their scandals, so they should be the ones that pay for the industry regulator,” a senior government source told The Daily Telegraph.
It is understood the 350-page report into ASIC provided to the Treasurer found that while ASIC had strong powers to investigate and prosecute, it was hamstrung by a lack of resources and technical skills and capability.
The government hopes the move will neutralise Labor’s call for a financial services royal commission, which has been rubbished by former RBA governor Bernie Fraser.
The banking scandals have resulted in action being lodged against ANZ and more recently Westpac in the Federal Court over claims of unconscionable conduct in deliberately manipulating interest rates.
Prime Minister Malcolm Turnbull recently attacked the banks for their poor treatment of customers.
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