Budget's $6.2 billion bank levy a 'hate tax': David Murray

Budget's $6.2 billion bank levy a 'hate tax': David Murray
Budget's $6.2 billion bank levy a 'hate tax': David Murray

Treasurer Scott Morrison’s Budget announcement of a $6.2 billion bank levy has been called a “hate tax” by David Murray, head of the financial system inquiry and former Commonwealth Bank CEO.

Other banking industry and business figures have also said the tax poses a similar threat to confidence as Labor's clamour last year for a Royal Commission, the Australian Financial Review reported.

Although resigned to the levy, banks remain alarmed at the tone used by the Treasurer as he sells the tax as well as tough new accountability standards for executives that will be policed by the Australian Prudential Regulation Authority.

Morrison, during a speech while introducing the tax, described banks to be taxed as an "oligopoly" and said that they were using their pricing power to the "detriment" of everyday Australians, the AFR said.

Murray, author of the Financial System Inquiry, said the announcement of the bank levy had all corners of the business community concerned.

"It's a hate tax. So the question becomes, who else do we hate? Which sector comes next?" Murray said.

Ross Barker, managing director of Australian Foundation Investment Company with close to $2 billion invested in the big four banks and Macquarie, said the government's stance was needlessly aggressive and would hurt all Australians.

"It's not helpful for government to attack any industry, let alone one that is critical to a properly functioning economy," Barker said.

A former big four bank CEO, speaking anonymously, said the government's stance was disappointing and the levy was populist nonsense.

"The principle of taxation is either about equity or efficiency and this is neither," he said.

Industry sources said chief executives of three of the big four banks who have been abroad on investor road shows on the back of half-yearly profit announcements, were being questioned by investors puzzled at the the tone being used against the banks by the government. 

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