Banks in line for $13 billion payday amid claims of poor super returns

THEY have been hammered in the Royal Commission all week for sins including gouging dead customers and giving disastrous advice — and now Australia’s big four banks stand to reap an unexpected $3 billion windfall.

THEY have been hammered in the Royal Commission all week for sins including gouging dead customers and giving disastrous advice — and now Australia’s big four banks stand to reap an unexpected $3 billion windfall over the next decade from the federal Government’s planned tax cuts.

New modelling shows by 2027-28 when Scott Morrison’s planned big-business tax cut is fully implemented the big four banks will net $3.7 billion more in tax savings than the $9.5 billion saving originally projected over the first 10 years of the policy.

The big banks are set for a $3 billion windfall.

By extending the impact of the tax cut to 2027-28, the analysis — based on data by the Australia Institute — reveals the Commonwealth Bank would be the biggest winner, with a forecast $4 billion tax cut over the next decade.

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Westpac and ANZ will be more than $3 billion better off under the Government’s proposed tax rates and NAB would bank an extra $2.6 billion by 2018.

Labor has seized on the latest data — which extends the cost of the tax cut to the last year of the medium term — to ramp up its against the company tax cut.

The big banks will cash in when Treasurer Scott Morrison’s planned big-business tax cut is fully implemented. Picture: AAP Image/Luis Ascui

The government has already passed legislation to lower the company tax rate for businesses with a turnover up to $50 million. The Senate is currently refusing to pass legislation that would apply a rate of 25 per cent to all business, including banks, by 2026-27.

Some Coalition backbenchers and crossbench senator Derryn Hinch are lobbying for Australia’s major banks not to receive the tax break following a string of damning revelations which have recently emerged from the banking royal commission.

Acting Shadow Treasurer Jim Chalmers said it “beggars belief” that the Turnbull Government would reward the banks with a $13 billion tax cut over the next decade following the “rorts, ripoffs and scandals which has surfaced during the Royal Commission”.

“These new figures show the four big banks stand to be the biggest beneficiaries of Turnbull’s big business tax cut,” Mr Chalmers said.

The Commonwealth Bank would be the biggest winner. Picture: Hollie Adams

“While victims are trying to put their lives back together, Turnbull and Co are rewarding the banks with a huge tax giveaway.”

Treasurer Scott Morrison said Labor used to believe in company tax cuts but was “addicted to taxing Australians”

‘Instead they are preparing to dump $200 billion in more taxes on Australians, including family-run small businesses, retirees and even pensioners,” Mr Morrison said.

The latest analysis comes as secret data, provided to credit agencies and seen by The Sunday Telegraph, also reveals bank-owned superannuation products are continuing to deliver poor returns to customers, sometime less than the cash rate.

The data shows that the cash investment options offered by bank-owned superannuation funds in both the pension and accumulation phase, ranked in the bottom 20 per cent of products for each of the past five years.

Three of the worst products — all offered by bank-owned funds — delivered returns of less than one per cent over five years compared to a median return of 2.4 per cent across all cash investment products.

The data leak comes as the royal commission into misconduct in the banking, superannuation and financial services industry prepares to probe the superannuation sector.

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