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South Australian Gov't Drops Bank Levy

by Mary Swire,, Hong Kong

15 November 2017

The South Australian Government has announced that it will set aside its Budget legislation, which includes the controversial bank levy recently defeated in the upper house.

The Government said that the legislation is being blocked by the Liberal Party, Australian Conservatives, and Advance SA. It claimed that the action in the upper house sets a new precedent for the way Budget bills will be dealt with.

The Government had proposed a levy of 0.015 percent per quarter on the liabilities of the four major banks, plus Macquarie. Had the legislation passed, the levy would have retrospectively applied from July 1, 2017. The Government had intended to use the money raised to fund payroll tax cuts and budget repair.

The upper house voted on November 1 to remove the measure from the Budget bill.

State Premier Jay Weatherill said that the Government had "taken the fight to the big banks," whereas opposition leader Steven Marshall had taken "the side of the banks over the people of South Australia."

The Government also announced that it will not take the tax to the state election next year, or seek to introduce the tax if re-elected. It said that it will reflect on Parliament's decision before deciding what to do with other blocked Budget measures, such as payroll tax cuts and stamp duty concessions.

Marshall said that it was a "humiliating day for Jay Weatherill and [Treasurer] Tom Koutsantonis, but a great day for South Australians with the dumping of the state bank tax."

He added: "South Australians know that they would end up paying for Labor's massive new tax, and that's why the Liberal Party stood up for South Australian households and businesses by opposing the state bank tax."

The news was welcomed by the Australian Bankers' Association, which had campaigned against the measure. CEO Anna Bligh said: "Today is a real victory for the people of South Australia and in particular for those who operate businesses. The decision will provide them with a greater level of confidence and certainty which is vital for businesses."

"Australian banks belong to all of us and they're about growth and driving good economic outcomes; today's decision will mean we can all get on with the job of making that happen."

TAGS: tax | business | banking | budget | Australia | payroll | legislation | tax rates | stamp duty | tax reform

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