The banks have already started to fight back, warning that borrowers and shareholders could be forced to pay the cost of the tax, which could be passed on to customers.
Morrison was blunt at his National Press Club Wednesday lunch: “A company has its value in the way it treats its customers”.
“This work will assist the national collecting institutions to fully utilise the assets available to them and better enable the ability for self-generated revenue”.
Morrison outlined plans to deliver A$75 billion in infrastructure funding and financing over the next years as the base of Australia’s next growth wave.
Mr Morrison also flagged personal income tax cuts to tackle bracket creep, which pushes taxpayers in to the next-highest tax rate as wages grow with inflation, in the next four years.
With the latest Newspoll showing the government trailing the opposition Labor Party at 52 points to 48 points, the budget contained measures to appease an electorate angry that a surging property market means they are unlikely to achieve the great Australian dream of owning their home.
That equates to $6.2 billion of new taxes from the banking sector over the next four years.
Much of the answer lies in the mounting public anger at the banks’ bad behaviour in recent years, over exorbitant housing interest rates and credit card charges, incorrect and even fraudulent financial advice given to bank customers, insurance rip-offs, and the general outrage at the banks making massive profits out of the Australian public, especially at a time of economic hardship and austerity.
The creation of a new external dispute resolution body has been announced, created to give Australians a “simpler, more accessible” way to resolve disputes with banks, super funds, and other financial institutions.
Morrison said the wider budget measures, which included the big bank levy and addition tax pressure on large multinationals, would put “downward pressure of the cost of living” for everyday Australians, saying it was “fair and reasonable” that the nation’s largest profiteers contribute to “fixing the budget”. “It is all of our responsibility to fund the NDIS”.
The four reported a combined half-yearly profit of A$15.2 billion, up 6.2 percent from a year ago, in the latest round of financial results, with their average return on equity at almost 14 percent – one of the best in the developed world.
Bank executives will also face tougher penalities for misconduct under a tough new new Banking Executive Accountability Regime, which will require all executives to be registered with the regulator.
Perhaps, in the end, the government is trying to do the Big Banks a favour. “We are not sending lawyers around the country for three years, we are acting now”, the Treasurer said, in reference to a royal commission.
The ACCC will also receive $13.2m to establish a unit to regularly inquire into financial system competition.
Customer deposits of less than $250,000 and additional capital requirements imposed on the banks by regulatory authorities are excluded from their assessed liabilities.
The government “will be seen to be cracking down on excess bank profits, and that’s a vote victor in every economy, but most especially so in Australia”, he said.
“It’s a bit of a quick sprint to the finish line for housing affordability but still an endurance race for any real tax reform”, he said.
Challenges in addressing first home buyer issues.
In 2017-18 the fund will get $261.2m more than raised by the levy, but after 2018-19 it will rely on funding exclusively from the levy.