Despite the hefty tax imposts in Tuesday’s budget, Finance Minister Mathias Cormann still insists the fiscal problem was a spending rather than a revenue one.
Cornman says the problem was clearly “on the spending side” but while the government had made significant progress it couldn’t get all the savings measures through the Senate.
“We’ve made some judgements that to the extent that we couldn’t, that the only other way, regrettably, that we were able to make up ground was on the revenue side of the budget.”
Cornman insisted the new bank tax should have no impact on the banks’ customers.
“It a fair proportionate contribution we believe. The way we have designed it it excludes mortgages, day to day accounts. There is no reason for banks to pass on this cost.”
But Anna Bligh, CEO of the Australian Bankers’ Association, says many Australians will be financially hit by the tax.
She has urged politicians to be less “cavalier” in their bank bashing and says the tax singles them out, and curbs competitiveness.
“I think most Australians care very deeply about having a financial system and banking system that is strong that is well regulated and which attracts investment from international investors”
In a National Press Club address on Wednesday, Treasurer Scott Morrison argued banks need to “pony up and help fix the budget” by absorbing fees from the tax.
But Bligh rejected this as simplistic: “taxes cannot be absorbed, they have to be paid” .
Authors: Michelle Grattan, Professorial Fellow, University of Canberra