extending the bank tax to the liabilities of foreign banks, however, would not only be technically difficult, but also folly.
But, no, says balance-of-power Senator Nick Xenophon, the bank tax needs to hit foreign banks too.
The tax targets are foreign (tick), banks (tick), they don’t vote (tick), and even better their shares don’t even show up in most people’s superannuation funds!
As Treasurer Scott Morrison adds, it’s also because the big banks make lots of money and no-one likes them.
By acting as a disincentive for foreign banks to set up shop or remain in Australia, it would reduce competition in the banking sector after some foreign banks pulled out in the wake of the financial crisis.
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The foreign-owned banks would raise an additional $750m or $800m over the forward estimates period
The Turnbull government has not yet given a clear signal about whether it will countenance foreign banks being part of the package.
Xenophon said including the foreign-owned banks would raise an additional $750m or $800m over the forward estimates period.
The leader of the Nick Xenophon Team told the ABC on Sunday that applying the tax to foreign banks was now a precondition of his support and he would talk to Labor about attempting to lock in that position.
The shadow treasurer, Chris Bowen, has signalled that Labor is prepared to consider applying the levy to foreign banks and has suggested the issue be examined by a Senate inquiry into the measure.
The legislation giving effect to the levy is likely to be introduced to parliament over the coming fortnight.
Turnbull government’s new bank levy conditional on the tax
The big banks are saying, ‘Well, if you are going to hit us with this, why aren’t you hitting the foreign banks and I think they have a point,” Senator Xenophon said.
A key crossbench senator has made his party’s support for the Turnbull government’s new bank levy conditional on the tax applying to foreign banks.
And the leader of the Nick Xenophon Team, Senator Nick Xenophon, has also flagged concerns about the government’s decision to keep the proposed laws under wraps until they are introduced into the parliament.
SHAREShare on Facebook SHAREShare on Twitter TWEETLink Senator Nick Xenophon will talk with the ALP about supporting his proposal.
But the push from crossbench powerbroker has been rejected by the government, with Finance Minister Mathias Cormann saying the major bank levy was designed to boost the competitiveness of smaller banks, including foreign ones.