A new report released today by the Institute of Public Affairs, has found that the South Australian Bank Levy has already damaged the investment reputation of South Australia, despite not yet being put to Parliament.
The Report The South Australia Major Bank Levy: Arbitrary, unjustified, and harmful for South Australia and the rest of the country, by Dr Chris Berg and Professor Sinclair Davidson, finds that the bank levy proposal is likely to have already harmed investment in South Australia and Australia’s investment reputation.
Dr Chris Berg, Postdoctoral Fellow at RMIT University and Senior Fellow at the IPA said, “The South Australian government has done little to assure investors that the bank levy is anything but an opportunistic grab for money off the back of a Commonwealth policy initiative that it had no part in designing.”
BankSA, now a division of Westpac and subject to the bank levy, has already announced that it has put a plan to expand 150 jobs in South Australia on hold, one London-based fund manager said in response to the South Australian bank levy that “I have reduced my investment exposure further. Politicians are running riot and appear to have absolutely no concern about the damage being done to the country’s reputation.”
“Damage has already been done. If the parliament rejects the bank levy, it ought to immediately work to ensure investors that South Australia is not a risky place to invest in. This may necessitate some sort of formal rule preventing such state based imposts from being imposed by this or future governments.”
“This tax lacks any form of rudimentary justification, apart from the claim of banking ‘super profits’ and that the Weatherill government would like the GST reformed.”
“Tom Koutsantonis claims the SA bank levy is intended to replicate a GST on financial products. It is unsurprising that the state would like a tax which it disproportionately benefits from to be raised.”
“South Australia has an unemployment rate of 6.9 per cent, surely the Government should wake up to itself that erratic raising of taxes hinders your situation rather than helps it.”
“Political turmoil in Australia’s energy markets and mining industry means that investors looking at any industry in Australia might fear that industry would be the next target of opportunistic politics,” said Dr Berg.
Dr Chris Berg is a Postdoctoral Fellow in the School of Economics, Finance and Marketing at RMIT University and a Senior Fellow at the Institute of Public Affairs. His PhD thesis, awarded in 2016, was on the history of prudential banking regulation in Australia.
Professor Sinclair Davidson is a Professor of Institutional Economics in the School of Economics, Finance and Marketing at RMIT University and a Senior Research Fellow at the Institute of Public Affairs.
For media and comment: Chris Berg, Senior Fellow, on 0402 257 681, or at [email protected]
For media coordination: Evan Mulholland, Media and Communications Manager, on 0405 140 780, or at [email protected]
To read the full report, click here.