Australia slaps a AUS6.2 billion tax on its major banks has created uncertainty among global investors
SYDNEY,June24:Australia’s decision to slap a A$6.2 billion tax on its major banks has created uncertainty among global investors who no longer see the country as a stable investment destination, according to the chief executive of National Australia Bank.
NAB chief executive Andrew Thornton said London-based investors he had met were concerned about the federal government levy, the Australian Financial Review reported on Saturday.
“They’re saying the environment in Australia is less stable, less consistent and they have less confidence in Australia as a place to invest.”
A second Australian state on Friday said it was open to charging its own bank tax.
South Australia infuriated major banks by announcing a A$370 million tax on five big lenders on Thursday and Western Australia said on Friday the option was “attractive”.
The governments of the three most-populous states – New South Wales, Victoria and Queensland – said they had no plans for a bank tax.
The federal and South Australian taxes will apply to the so-called ‘Big Four’ banks – Australia and New Zealand Banking Group Ltd (ANZ.AX) , Commonwealth Bank of Australia(CBA.AX) , National Australia Bank (NAB.AX), and Westpac (WBC.AX), plus top investment bank Macquarie Group (MQG.AX).
The levy has been fiercely opposed by the Australian Bankers Association (ABA) but has had broad popular support.
Anti-bank sentiment is running hot following a series of misconduct scandals and years of record profits.
Federal Treasurer Scott Morrison said South Australia must explain the state tax and how it fitted within state tax arrangements.
“Our measure by contrast is quite straightforward. We’re a national government, we’re a government that operates federally and we’re in position to put these measures in place,” he told reporters on Saturday.