Terry McCrann: Why bashing the banks is silly
THE Prime Minister says “no” not once but twice. A former premier says “yes”. All three answers were sensible and good for bank customers, writes Terry McCrann.
Terry McCrann
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THE Prime Minister says “no” not once but twice. A former premier says “yes”. All three answers were sensible and good for bank customers. That means you.
Malcolm Turnbull rejected calls — apparently from his own backbench, it was reported — to exclude the big banks from the government’s proposed cut in company tax. He also, again, rejected the call for a royal commission into banking. And then promptly fled the country.
I jest. He was on his way to meet the new New Zealand PM, Bill English. English is, by the bye, bidding to demonstrate that good treasurers (in NZ they call them finance ministers) can also make good PMs after the voluntary departure of the long-serving and highly successful PM John Key.
The record on that score on this side of the Tasman is not good. The last semi-good treasurer (his instincts were good but he was too young and got ground down by another, more imperious, PM named Malcolm) to make a good PM was, of course, John Howard.
Good PM? Actually, Australia’s second best, as well as second-longest serving, in both cases to Robert Menzies.
But that was only after spending more than a decade in the wilderness, being labelled at his political nadir as “Mr 18 per cent (popularity).”
Australia’s greatest (as in, grandiose Napoleon-style) treasurer Paul Keating made a lousy PM. While Australia’s best (as in, delivering good outcomes for you) treasurer in Peter Costello didn’t get the chance.
Well, at least not yet. If only people had listened to me, Jeff Kennett could have stormed in from the wilderness to save Victoria from the debacle of the Daniel Andrews Labor Government.
That could have been some “dream team” — Kennett in Spring St and Costello back in charge in Canberra. Maybe Costello still could. After all, Donald Trump stormed Washington at age 70, Costello is not yet 60.
But I digress. The current PM was being, well, very prime ministerial in knocking back those two calls.
Now the first actually remains hypothetical. You can’t exclude banks from a company tax that doesn’t happen.
We are yet to see whether he gets to cut company tax for any comp-anies, even the small ones.
The “big guys” wouldn’t get their cut for up to 10 years. With Labor behaving like they never want to be in govern-ment ever again and the feral Senate crossbench, there’s precious little prospect of even that.
But that idea of excluding banks is so dumb on so many levels. All company tax is ultimately paid by the business’s customers. So these supposedly Liberal and National backbenchers are calling for bank customers to pay more. At the same time it demonstrates they don’t understand how the dividend imputation system works.
Most bank shareholders are Aussie, so most of the company tax cut will be “paid” by those shareholders getting smaller franking credits.
More broadly, if you create different company tax rates you are setting up a recipe for tax complexity and avoidance.
And at the most basic populist level, these people want a tax cut for foreign-owned multinationals but not Aussie-owned banks. Great all-round own goal.
As I have explained, at length, and as the PM did himself, the lengthy talkfest of a RC into banks would be utterly pointless. Far better to have real-time solutions from a more effective, better-resourced ombudsman.
And — populist and disappointing as it might be, but that’s up to those individual backbenchers — the twice-yearly pollie-grilling of bank CEOs.
That brings us to the left-field — and that term is used deliberately — of former Queensland Labor premier Anna Bligh to head the banking lobby group, the Bankers Association.
Again, some Coalition backbenchers attacked the move as burning bridges with the government. No, it is very deliberately aimed at building bridges with the Labor opposition. That’s where the real idiocy about the big banks and banking resides.
Although Bligh did not have the greatest record as premier — picking up where her predecessor Peter Beattie left off in splurging on public servants and running the state deep, and then deeper still, into debt, she’s not a rusted-on ideologue and arguably exactly what the banks need to present their case.
At the same time, I doubt that Opposition Leader Bill Shorten is just going to execute a 180-degree turn just because of Bligh. It’s all-too popular bashing banks.
And Shorten has demonstrated, on the broader fiscal and policy front, with Labor’s irresponsible approach to addressing Australia’s problems, if that means he inherits a scorched, if not devastated, landscape, so be it. What matters to him is that he’ll be in The Lodge.
A final thought on the treasurer-to-PM matter: yes, the record of good-treasurer becoming good-PM is not great. But then equally, our worst-ever PMs, Kevin Rudd and Julia Gillard, were never treasurers or even shadow treasurers. And then there’s the current PM, who was also never treasurer, although he was briefly an undistinguished shadow treasurer, when Wayne Swan was riding high on the remnants of Costello’s budget surpluses.
Make your own call.
Originally published as Terry McCrann: Why bashing the banks is silly
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