Canberra: Australia’s biggest banks face a new tax, tougher penalties for misdeeds and efforts to spur competition as Prime Minister Malcolm Turnbull taps voter resentment against the lenders to finance infrastructure and health spending.
The government will raise A$6.2bn ($4.6bn) from the nation’s five biggest banks over the next four years by imposing a 6 basis points levy on liabilities over A$100bn, Treasurer Scott Morrison said in the budget released Tuesday in Canberra. It won’t apply to superannuation funds or insurance companies.
“This represents an additional and fair contribution from our major banks, is similar to measures imposed in other advanced countries, and will even up the playing field for smaller banks,” Morrison said in his budget speech.
Shares of the nation’s big four banks fell after news of the levy leaked earlier in the day.
Commonwealth Bank of Australia slumped 3.9 percent, the biggest decline in 15 months, at the close of trading in Sydney.
Westpac Banking Corp dropped 3.5 percent, Australia & New Zealand Banking Group Ltd shares fell 2.6 percent and National Australia Bank Ltd declined 2.1 percent.
The tax will force banks to either take a blow to their profitability or pass the charges on to customers in the form of lower deposit rates and higher borrowing costs.
“Banks need to explain what they do to their customers, and customers can go elsewhere,” Morrison said in an interview with Bloomberg Television.
“If they want to put up their prices, that’s a matter for them.”
