Don’t punish banks with higher taxes: Business Council of Australia

BCA chief Jennifer Westacott has warned against penalising the banks for misconduct by denying them a corporate tax cut.

Chief Executive of the Business Council of Australia Jennifer Westacott. Picture: AAP.

The Business Council of Australia has warned against punishing the banks for the misconduct revealed in the Hayne royal commission by denying them a corporate tax cut.

BCA chief Jennifer Westacott told the Senate’s Economics References committee today that the revelations aired in the royal commission were “deeply disappointing”, and called for swift and decisive action against banking industry figures who were responsible.

But she said singling out a single economic sector for “populist punishment”, as demanded by crossbencher Pauline Hanson, would damage the economy.

“I think to use tax policy to punish a sector is only going to punish their customers, including many small businesses; it’s only going to punish their shareholders, it’s only going to punish their staff,” Ms Westacott said.

“And why are we going to punish the bank manager in a regional community who has been the backbone of that community getting small businesses going, getting housing loans?

“Why are we going to punish the economy? Most people agree the banks are central to the economy. It’s not going to solve the problems that the royal commission is clearly highlighting.”

Ms Westacott was appearing before the committee to explain the BCA’s commitment to senators last month that businesses would boost investment in Australia if they received a corporate tax cut, which would lead to higher employment and stronger wage growth.

She and BCA president Grant King reaffirmed the commitment, which was also endorsed by executives from Qantas, Woolworths, and JBA Australia.

The committee heard the statement had been drafted and released within 24 hours to try and convince senators to vote for the government’s tax plan, which would lower the corporate tax rate from 30 per cent to 25 per cent for businesses with a turnover of more than $50 million.

However, the last-minute lobbying failed to convince key crossbencher Tim Storer, who torpedoed the bill late last month.