High Court challenge on the cards if SA bank levy passed

The announcement was made today (22 August) by ABA chief executive Anna Bligh. She said: “Banks are campaigning against the tax because it is not in the interests of South Australians, and they are prepared to fight it in court.”

The shot across the bow was not limited to South Australia, with Ms Bligh adding: “Other states will also face a constitutional challenge in the High Court if they propose to single out banks for new taxes.”

Introduced in the state budget on 22 June, the proposed $370 million levy will target all four major banks plus Macquarie Bank. The 0.015 per cent tax will apply to bonds and deposits of more than $250,000.

In its announcement, the ABA pointed to recent polls in South Australia that purportedly showed widespread opposition and concern about the tax and its potential impact on jobs.

Ms Bligh said: “There is no justification for new taxes on Australia’s major banks. Banks are already the nation’s largest taxpayers, contributing $14 billion in taxes last year.

“On top of that, banks paid $26 billion in dividends to shareholders and superannuation funds in 2016.”

[Related: SA bank levy could open the floodgates: UBS]