Amy Kadel, David Stuart, Kieran Salsone

Big Four banks' new tactic as they try to stomach new tax

AUSTRALIA'S major banks are trying a new tack in their war against the Turnbull Government's $6.2 billion bank tax, raising concerns politicians could have a "blank cheque" to lift the levy unless it's locked into legislation.

Bank representatives are arguing today the Government's proposed tax rate - a 0.06 per cent annual fee on liabilities of more than $100 billion - should be locked into law rather than left open for Treasurer Scott Morrison or a future Labor Government to change.

Australian Bankers Association chief Anna Bligh told The Australian the tax rate should be "baked into legislation" to ensure any changes would have to pass both houses of parliament.

"Anything less would be writing a blank cheque for the Treasurer and any subsequent government," Ms Bligh said.

The ABA's concerns are based on a UK bank tax, where the levy was initially 0.04 per cent in 2011, raised to 0.07 per cent in 2012 and then later lifted to 0.21 per cent.

Revenue from the British bank tax is set to increase to more than $30 billion over four years to 2020.

Westpac chief financial officer Peter King told The Australian the levy and the number of years it would be imposed should be set in legislation.

"Westpac believes the bank levy rate should be set out directly in the legislation like the budget repair levy, which prescribed the rate and the period it would operate," he said.

"Given the objective of the new levy is to repair the budget, the legislation should also be drafted so that it ceases once the budget is in surplus.

"If future governments want to change the levy it should be subject to a change in legislation, where it can be appropriately debated in the parliament."

The Treasurer said at the weekend he had "no plans" to raise the levy.

This latest track comes after National Australia Bank chairman and former Treasury Secretary Ken Henry yesterday warned the tax would impact the economy and could weaken the banks' ability to respond to any economic headwinds.

News Corp Australia

Why you should change your iPhone passcode

Why you should change your iPhone passcode

Do you use a six-digit passcode for your iPhone?

Splendour tickets sold out in minutes

Splendour tickets sold out in minutes

If you missed out, don’t panic and read on

The joy is in the giving, and giving, and giving

The joy is in the giving, and giving, and giving

The joy is in the giving, and giving, and giving

Local Partners