OPINION: Bank levy shows two scary things
THE introduction of the bank levy showed two scary things: The Federal Treasurer can't count. And nor can the big banks.
Scary because we trust the Treasurer to manage the economy and scary because we trust the banks to look after our money and often our super.
The Treasurer overestimated the amount the banks would be paying under the new levy - by possibly 50%. It's a bit hard to tell exactly how much until the dust settles.
And he forgot that if they paid the new levy in full, their massive profits would fall and the tax paid on those profits would also fall and that would further reduce the overall tax take from banks.
The banks also over-estimated it. And the howl of protest was massive.
Way out of proportion. Pay your way guys, you are pretty much the world's most profitable banks and you get a free guarantee from the government. How's that for a business model?
The banks also whinged because they had to sign a non-disclosure agreement if they wanted an advance viewing of the bill. Perhaps that experience will make them much more understanding of any bank customers who also don't want to sign a non-disclosure agreement in future.
Don't hold your breath waiting for that compassion.
And they are sure to pass the levy on, just as they instantly pass rate rises and any other costs on with some extra on top for them.
Funny that any rate falls take a while (sometimes forever) to get passed on.
And they never seem to drop the interest rates on credit cards and some other tools to which their customers are addicted.
Well, there are plenty of excellent alternatives out there, including credit unions and smaller banks. They may not be compassionate, but they are usually more understanding.
But in the terrible times the poor big banks are going through, they are getting innovative.
With people increasingly moving to online banking and using less cash and more credit cards, banks have found ways to cut their overheads and boost their returns. No, not through interest rate scalping, nor increased fees. Fees are a bad look.
But service reduction works wonders. Especially when all banks do the same thing at about the same time.
No, I did not say collusion.
I would never suggest banks got together and made the same decision for the same reason at the same time. I didn't hint banks have a vested interest in co-ordinated action so none looked any worse than another.
After all, why state the obvious?
Synchronised swimmers, eat your hearts out. Our banks are naturals at being in perfect sync almost every time they do something.
Pollie Tickled is a opinion column.