On Wednesday (15 November), the Premier announced that the Upper House would “set aside” its Budget legislation, including the major bank levy and key job creation measures, after it had been met with opposition from the Liberal Party, the Australian Conservatives and Advance SA.
The Premier, therefore, pulled the bill after saying that it was “dead”, adding that every avenue had been exhausted.
According to the SA state government, the tax of the five biggest banks (ANZ, CBA, NAB, Westpac and Macquarie) mirrored that of the federal major bank levy and reportedly would have raised $370 million over four years (with that figure later revised to $417 million).
The bill would also have seen stamp duty concessions of up to $15,500 for purchasers of off-the-plan apartments, pre-construction grants of $10,000 for purchasers of off-the-plan apartments, five-year land tax exemption for investors purchasing off-the-plan apartments, and a 4 per cent stamp duty surcharge for foreign buyers of residential property.
Suggesting that the bank levy was designed “as a revenue measure that focused on five large businesses reaping super-profits each year to allow the state government to invest millions of dollars supporting South Australian small businesses creating jobs,” the Premier blamed the opposition for blocking the legislation and said that the action “sets a new precedent for the way Budget bills will be dealt with”.
Premier Jay Weatherill said: “We’ve taken the fight up to the big banks, but with [Liberal leader for SA] Steven Marshall taking the side of the banks over the people of South Australia, this has no chance of getting up.
“For my government, this was all part of SA jobs being our number one priority.
“While Steven Marshall and Nick Xenophon side with large corporate interests, I will always stand up for South Australian small businesses.”
He added that jobs “remain the government’s number one priority”.
SA Treasurer Tom Koutsantonis also took aim at Steven Marshall and opposition MPs, saying: “[They] had a choice, and they chose to side with the big banks over South Australian small businesses.”
However, opposition leader Steven Marshall said that while the decision was a “major humiliation”, it was, nonetheless, a “victory for South Australians”.
He commented: “[This] is a humiliating day for Jay Weatherill and Tom Koutsantonis, but a great day for South Australians with the dumping of the state bank tax.
“South Australians knew that they would end up paying for Labor’s massive new tax, and that’s why the Liberal Party stood up for South Australian households and businesses by opposing the state bank tax.”
Banks welcome scrapping of tax
The heads of the big banks have come out to welcome the change, with ANZ chief executive Shayne Elliott saying that it was a “positive decision for all South Australians” and a “clear sign the state is once again open for business and investment”.
NAB chief executive Andrew Thorburn stated that it was the “right result for all South Australians”, while Westpac chief executive Brian Hartzer said that it was a “common sense” decision.
The Australian Bankers’ Association also welcomed the decision to abandon the bank tax, with ABA CEO Anna Bligh stating that it was a “real victory for the people of South Australia and, in particular, for those who operate businesses”.
Ms Bligh asserted: “Australian banks belong to all of us and they’re about growth and driving good economic outcomes; today’s decision will mean we can all get on with the job of making that happen.”
Annie Kane is the editor of Mortgage Business.
As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also a regular contributor to the Mortgage Business Uncut podcast.
Before joining Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.