Senior bank executives summoned to Sydney by Treasury

The government has summoned senior bank executives to Sydney tomorrow for a meeting on the budget’s proposed $6.2bn levy.

Treasurer Scott Morrison in his office at Treasury in Canberra. (Picture Kym Smith)

The Turnbull government has summoned senior bank executives to Sydney tomorrow for a two-hour session on the budget’s proposed $6.2 billion levy that has resulted in tumbling share prices and sent relations with the sector into a deep freeze.

Bank sources said they had been given 24 hours to prepare commentary and learn about the design features of the most significant intervention in the banking industry since the global financial crisis.

“In effect it’s a f ... you message from the government,” one source said.

Each bank is likely to send about three representatives from key areas, including finance, treasury and tax, to the meeting.

The bankers will be briefed by Treasury officials.

There is a tight deadline to implement the levy, with the government planning to introduce a Bill into parliament this month ahead of a July 1 implementation of the measure.

The banks targeted for the levy are those with liabilities worth more than $100bn.

They include Commonwealth Bank, Westpac, ANZ Bank, National Australia Bank and Macquarie Group.

While rumours about the tax swept the market yesterday, none of the bank chiefs heard confirmation from the government until about an hour before Treasurer Scott Morrison rose to deliver his budget speech at 7.30pm.

The lack of consultation has enraged the banks, and was in sharp contrast to other measures announced in the budget where there was extensive consultation.

The banks’ market power has previously enabled them to pass on extra costs to customers, with shareholders also bearing some of the pain.

This time, however, the sector will have to consider their options more carefully, after the government announced an inquiry by the competition watchdog into residential mortgage pricing.

As part of the inquiry, the ACCC will be able to require the banks to explain changes or proposed changes to mortgage pricing, including changes to fees, charges or interest rates.

The major-bank chief executives also have to appear every six months before the House economics committee, chaired by Liberal MP David Coleman.