NAB Willing To Discuss Australian Bank Super Profits Tax

by Mary Swire, Tax-News.com, Hong Kong

13 July 2010

National Australia Bank’s Chief Executive, Cameron Clyne, has disclosed that, even though he is against the idea, he would be prepared to talk about a super profits tax on banks.

Suggestions of such a tax were floated in May this year when the government proposed; Australian's four largest banks are forecast to earn up to AUD20bn (USD17bn) this year.

Clyne said that he understood why a tax could seem appropriate as the profits being made by the banks seemed large and, if the proposal of additional taxation on the banks was to be formally raised, he was convinced that the banks should be available to talk about it.

However, if such measures were mooted, he said that it should be made clear that more taxes on the banks would not be justified. While the profits made by the banks were large, his opinion was that they already pay fair amounts of tax. Excess profits were not being made from their retail operations in support of the real economy, or judged by any measure of return on the huge amounts of capital employed by the banks.

It is, in any case, felt that a super profits tax on Australian banks appears unlikely as the government would be concerned about the effect of the measure on their ability to raise funds in the market to finance their necessary lending operations as the economy recovers.

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