On Friday, the ALP’s ‘Fair Go Budget Plan’ supplied the most slender of new data on the “Banking Fairness Fund”, the most recent populist round of bank bashing for Labor leader Bill Shorten and his shadow cabinet back in February.
The solitary direct reference to this fund is a line item that at least clarifies that this is a “levy”, meaning a tax, and will presumably be defined precisely as so many basis points on bank liabilities.
Then treasurer (and now prime minister) Scott Morrison legislated the (briefly controversial) first instalment of this bank tax – imposed at the rate of six basis points per year levied on unguaranteed deposits and wholesale liabilities of the five largest banks (including Macquarie) following the 2017 federal budget.
Labor’s levy will need to be supplementary rather than an amendment to the current tax rate, given its intention “to require the nine biggest banks in Australia, those listed on the ASX 100, to contribute proportionally by market capitalisation”.
This ropes in AMP, but also catches banks barely mentioned at last year’s royal commission, including the three listed regionals.
Labor’s budget plan sets out only the revenue projected over the four years to 2023. These are: A$105 million, $198 million, $158 million and $158 million.
This is pretty small beer in comparison with the yield from the current bank tax. Projected to produce $9 billion over five years at the 2018 budget, the most recent data shows tax collections have missed early targets.
The recent bank reporting season showed reduced tax payments overall during the six months to March 2019.
The varied revenue target in each year must be a function of the ALP’s spending plans matched directly to this new levy.
These remain the same as announced by Shorten three months ago: doubling the number of financial counsellors, funding 200 more community lawyers and “20,000 flexible support packages of up to $10,000 to survivors of family violence fleeing violent relationships.”