Australian banks lick wounds after tax hit
- Author: Zachary Reyes May 18, 2017,
May 18, 2017, 14:35
It was a big night for treasurer Scott Morrison, who finally laid to rest the ghosts of his predecessor Joe Hockey's disastrous first budget in 2014, including $17 billion worth of what became known as "zombie savings" that remained on the Treasury books but could not gain the Senate support to become legislation.
Now in what looks like a significantly more generous Budget than before from the Coalition government, Prime Minister Malcolm Turnbull appears to be trying to reverse that negative reputation and make a comeback from tepid polling and a near miss at the 2016 election which severely weakened his government.
The backflip resulted in a bigger A$29.4 billion deficit for 2017-18 than the A$28.7 billion forecast at the mid-year review in December.
$10B cut from Queensland's share of the National Health Reform Agreement.
"Our banks pool 30 billion Aussie dollars in profits annually and this is 1.5 billion Aussie dollars in tax (per year for four years)", Morrison said.
Growth this year is expected to be 2.5 per cent.
Australia's banking sector reacted with fury on Wednesday to a government plan to slug lenders with a hefty new levy, calling it a "naive" tax grab that sent the wrong signal to global financial markets.
Until now investors could claim a tax deduction on travel costs when visiting a property they owned, while there has been no limit to the number of times an owner could visit each year.
Treasurer Scott Morrison has pitched his second budget delivered on Tuesday as making the right choices to take Australian families and businesses out of a "difficult period".
He also urged customers to shop around if they felt they were not getting a good deal pointing out that smaller regional banks were not affected by the levy.
Business Council president Jennifer Westacott said it was a budget for "a reality world".
In March, The Daily Telegraph reported that government ministers were looking at some of the avenues by which such a tax could be applied.
Until now, employers have contributed one to two per cent of their payroll to training if they employ foreign workers and these requirements have been hard to police, Morrison said.
He cautioned the so-called Big Five - Commonwealth Bank, Westpac Banking, Australia and New Zealand Banking, National Australia Bank Ltd and Macquarie Group Ltd - against passing the costs on to consumers.
The government plans to increase defense spending to 2 percent of GDP by 2020-21 - three years ahead of its initial target.
"Are you going to turn around and say in a few years" time to parents of disabled kids, "sorry, there's no money in the till'?" he said on ABC radio.
First home buyers, downsizers and renters can expect some help from the 2017 budget.
"Measures to offset may be asset or liability price adjustments but an intended review into competition in the banking system will make the task of recovering the cost of this levy incrementally more challenging". "But we will work with the states and territories and local governments to get more homes built".