South Australia’s state-based version of the federal bank levy is unlikely to be the last tax increase for Australia’s major banks, says UBS. South Australian Treasurer Tom Koutsantonis announced his own version of the federal bank levy in Thursday’s budget, which is expected to raise $97 million in 2017-18. The SA bank levy will have a similar model the federal levy, taxing 6 basis points of applicable bank liabilities.
The Australian Bankers’ Association (ABA) was quick to denounce the SA bank levy as an “outrageous tax grab”, labelling it as an example of “triple dipping” by the state government. ABA chief executive Anna Bligh called on the other state premiers and first ministers to “rule out a similar tax”. But UBS bank analyst Jonathan Mott said “Pandora’s Box is officially open”, and it is possible other states will follow SA’s lead and introduce further levies on the banks.
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