Nick Xenophon says his Senate bloc will support the Turnbull government’s contentious $6bn bank levy if it is also applied to foreign-owed companies, not just the big five Australian banks.
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.
Xenophon said including the foreign-owned banks would raise an additional $750m or $800m over the forward estimates period.
“That itself could fund a last resort compensation scheme for the many tens of thousands of victims of financial mismanagement and fraud in this country, particularly those managed investment schemes where there are literally thousands of Australians whose lives have been devastated by them,” the Senate crossbencher said.
Xenophon also expressed concern about a confidentiality agreement the government had applied to the proposed legislation as it attempted to work through the technical implications with the banks.
“I think that we do need to have a proper process,” Xenophon said. “The fact that we haven’t seen the legislation worries me.”
The big banks have blasted both the levy, which the sector characterises as an ill-considered cash grab, and the confidentiality process the government has imposed, under which bank executives have been required to sign confidentiality agreements before they are allowed to view the legislation that imposes the $6.2bn levy.
Furious public opposition from the big banks looks set to continue throughout the coming week, with federal parliament resuming in Canberra for a fortnight, and looming Senate estimates hearings, where officials will likely face questions about the proposal.
While the levy is supported by many smaller banks, on the basis it will improve competition, the big banks have not ruled out launching a major advertising blitz against the measure along the lines of the campaign the mining industry ran against Labor’s profits tax.
The legislation giving effect to the levy is likely to be introduced to parliament over the coming fortnight.
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.
At the National Press Club last week, Bowen said not applying the levy to the foreign-owned banks could be characterised as a form of “reverse protectionism” – but Labor had not yet reached a final position on the issue.
Labor on budget night said it would support the government’s proposal but has concerns about some of the associated consequences, and about the fact it will be passed through to customers.
The Turnbull government has not yet given a clear signal about whether it will countenance foreign banks being part of the package.
