A comparable landscape: Ascertaining the policy in Australia’s bank levy

Priscilla Varsanyi

When the Australian Government released
its 2017-18 Budget, headlines followed. 

One of the more surprising announcements
was the proposal of a bank levy targeting
the five major Australian banks. The banks
in turn opposed what they viewed as an
ostensible revenue grab.  2 
A notoriously
short consultation period  3
for the
immediately affected stakeholders was
followed by the release of draft legislation
a few weeks after the Budget
The explanatory
memorandum accompanying the
Major Bank Levy Bill 2017 attempted
to reflect a more principled approach
than the justifications expressed in the
Budget paper — albeit still less cohesively
articulated when compared to some other
jurisdictions which have adopted similar
measures in recent years, and which the
Australian levy seeks to align itself with. 
Indeed, while the Australian bank levy only
applies to Australian banks, the Australian
bank levy cannot be viewed in isolation, without reference to the international
picture and the international regulatory
frameworks which have come into place
following the global financial crisis of
2007-08. However, given certain
idiosyncratic features of the Australian
bank levy, such a comparison raises
further questions. 
In a recent article, published in The Tax Institute's journal for corporate tax practitioners, The Tax Specialist, Priscilla Varsanyi* explores the policy reasons
for the implementation of the bank levy
in Australia, and discusses whether the design of the levy is
appropriate in light of the objectives
stated by the government. To this end, the article also considers the experiences
of certain European countries which have
implemented a bank levy in recent years
and, in particular, the policy rationale
employed in those instances.

* Priscilla Varsanyi is a Senior Tax Analyst with Deloitte Australia.

1 See, for example, J Eyers, “Shock ‘stealth tax’
could weaken sector”, Australian Financial
Review, 11 May 2017; and T Boyd, “Treasury’s
embarrassing tax debacle”, Australian Financial
Review, 12 May 2017.

2 See, for example, J Eyers, “Shock ‘stealth tax’
could weaken sector”, Australian Financial Review,
11 May 2017.

3 NAB noted in its Senate submission that it had
only 39 hours to respond to the draft exposure
legislation: NAB, submission no. 5 to the Senate
Economics Legislation Committee in relation to the
Major Bank Levy Bill, 15 June 2017.


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