The game is officially up on the Treasurer’s key claim that his bank tax won’t be passed on to Australian consumers.
The Treasury regulatory impact statement that accompanied the bank levy legislation on the Government’s bank tax actually envisages the tax being passed on to consumers and others:
“It can be passed through to those the banks lend to (in respect of residential mortgages, business lending and personal credit), deal with or provide services to, or their non-equity funding sources (wholesale capital markets, depositors) or be borne by the banks themselves (through reduced profits, or via increased efficiency or other cost-cutting measures).” (page 35)
This comes on top of revelations of a $2 billion black hole on the bank tax and Senate Estimates being told about criminal investigations surrounding leaking of official information that bank shares lose billions of dollars of value.
The Finance Minister was today running a protection racket for the Treasurer, refusing to release the Treasury economic modelling the legislative documents say has been done and stopped Treasury officials answering questions about the assumptions in the modelling.
A central claim from the Treasurer from Budget night onwards is that the banks won’t pass on the cost of the bank tax to bank customers.
At the same time the Treasurer has argued that this measure “levels the playing field” and will somehow boost competition.
The only way the second argument works is if the first argument crumbles – that the bank tax cost needs to be passed on in order to be a pricing single to consumers.
Labor’s in-principle support for the Government’s bank tax is not a blank cheque for the Treasurer’s incompetence and we will continue to explore these issues through a Senate inquiry into the legislation.