Australian Budget have instituted a 0.06 percent increase in the annual levy on the liabilities of the country’s five biggest banks, which will reportedly gather A$1.5 billion (NZ$1.6b).
Banking expert Claire Matthews recons there won’t be an immediate impact on New Zealand customers, NZ banks are separate subsidiaries of their Australian couterparts. But Kiwis could still feel the pinch, regardless.
“The Australian banks will seek to compensate for the levy, which may include expectations of higher returns from their New Zealand subsidiaries, although the main compensation will come from their Australian customers,” Stuff quoted Matthews as saying.
“Any costs imposed on banks will be passed on to their customers in some way. And the Treasurer’s suggestion to bank customers to shop around is good but unlikely to have much impact in practice because changing banks continues to be an unattractive option for most people.”
Chartered Accountants Australia and New Zealand head of Australian tax Michael Croker added: “Recent bad press about the big banks means the levy is likely to enjoy bi-partisan political support in Australia.
But the design features will be many: ascertaining which liabilities are in scope, territorial issues, quarterly reporting obligations, competition issues vis-a-vis other financial institutions, and importantly, who actually bears the burden of the tax.
“No doubt New Zealand officials will be tasked to review the Budget and prepare a report for relevant ministers.”