South Australians split on bank levy as new report shows policy is less than 1/3 of IMF ‘safe maximum’
A new report from The Australia Institute’s Senior Economist, Matt Grudnoff, reviews the economic impact of the South Australian government’s proposed bank levy.
The research finds that the banks are not only very capable of paying the 0.0036% levy on the same liabilities that the federal government levy is based on, but also that the levy is good economics, justified by the unique structures governing banking in Australia which help make it the most profitable banking sector in the world.
- SA bank levy is just $36 in every $1,000,000 of bank liabilities
- Bank levies are common around the world and Morrison and Weatherill levies are only a third of IMF safe maximum
- The bank levy could be employment creating if the money is used in employment intensive services like health and education
- The bank levy simply can’t deter investment in SA as it is levied on a proportion of the banks national liabilities
- Federal and state governments are suffering revenue problems and they have a choice of raising taxes on workers or to tax world’s most profitable banks
- The big banks pay their 5 CEOs $45 million which is about half what the SA levy is expected to raise
- The federal government should encourage other states to follow SA lead as the bank levy is away for states to reducing their reliance on the federal government