Regional banks have conditionally thrown their weight behind the Turnbull Government's proposed A$6.2 billion levy on the major banks and Macquarie, but want key aspects of the enabling legislation binned. Leading regional players such as Bank of Queensland and Suncorp have raised a raft of concerns about the Major Bank Levy Bill in submissions made to a Senate committee inquiring into the draft legislation. Bank of Queensland chief executive Jon Sutton has aired the most detailed critique of the bill, raising concerns that the measure would have only a negligible effect on improving competition in the Australian banking market. While Treasurer Scott Morrison has advanced arguments that the levy would "unquestionably" boost competition, Sutton believes the draft legislation will achieve little to level the playing field and is calling on Treasury officials to furnish analysis to justify the minister's claim. "Although BOQ supports the levy, our calculations indicate it is too small to materially affect competition in the manner promoted by the government," Sutton told the Senate Economics Committee. "Given this, we ask the [Senate] committee to request Treasury to explain how the levy supports the unquestionably competitive banking system promoted by the Treasurer." Sutton wants sections of the bill ditched - especially the arbitrary powers it gives Treasurer Scott Morrison to amend the methodology for calculating the levy. BoQ and other regional banks are worried the arbitrary powers might eventually lead to the new tax being levied on them at short notice. Sutton is supporting the position advanced by the major banks and the Australian Bankers Association (ABA) that these powers be removed in the final legislation. "Bank of Queensland shares the ABA's concerns and is troubled by the fact that the minister could seemingly extend the levy to BOQ and other regional banks," Sutton warned the committee. "It is not clear why the government believes these powers are required." Suncorp supports the levy bill in its current form, although it too wants the government to assure regional deposit takers that the levy will only be imposed on banks that derive a credit ratings benefit from implicit sovereign guarantees cited by the global ratings agencies. "We believe that the levy should only be imposed on those institutions that enjoy a credit rating uplift, and that it would be inequitable for the levy to be imposed on banks that do not enjoy this advantage, simply because they are seen to be large and profitable," Suncorp's head of banking David Carter told the committee. Suncorp is worried that several regional players could in the near future exceed the threshold of $100 billion of wholesale funding liabilities, bringing them within purview of the levy. "It is possible to envisage a future scenario where a bank crosses the $100 billion