The country's five biggest banks are embroiled in a new tax brawl, after South Australia's government infuriated banks by imposing a new levy on the financial giants it said were "significantly undertaxed".
The SA government led by Premier Jay Weatherill, who has long argued for financial services to be subject to GST, on Thursday announced a shock levy that is forecast to raise $370 million over the next four years from Commonwealth Bank, National Australia Bank, Westpac, ANZ Bank and Macquarie.
Quote:
Banks lashed out at the move, with ANZ chief Shayne Elliott saying it was an "ill-considered cash grab", a NAB spokesman branding the tax "poor policy without logic", and Westpac calling the tax a "disgrace".
Looks like Banks will have to Raise Rates to cover the Cash grabs from State and Fed govt's
Looks like Banks will have to Raise Rates to cover the Cash grabs from State and Fed govt's
Ahh...Good Times...
Trolling aside, I'm not sure that this is legal. Banking used to be under state legislation and regulations, but not anymore, it's all federally controlled. What right do states have to tax a federally regulated industry.
Take risks - if you win you will become wealthy, if you lose you will become wise
Trolling aside, I'm not sure that this is legal. Banking used to be under state legislation and regulations, but not anymore, it's all federally controlled. What right do states have to tax a federally regulated industry.
Sure, the state (SA) always wants money, I just question the legality, although surely they ran it past the legal team.
We'll see I guess.
There's probably some sneaky ways they can tax them, that's the problem with governments - they are their own rule makers. I'd expect there's a fleet of lawyers assembling at the big 4 as we speak
Increasing taxes in that fashion really says SA is closed for business.
Banks will probably end up pushing the tax onto consumers through higher loan fees and/or rates.
Considering government makes such large amounts from real estate taxes and real estate transactions, what is the expected net benefit?
Probably the increase in tax is largely offset by the decrease in eventual loan takeup and real estate turnover.
Also for people making a decision between SA and another state it could lead to a decision to forego SA - not good for other industries that may be wanting people to move to SA for their business interests?
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