The Government’s imposition of a levy on the major banks plus Macquarie represents “all fizz, no pop” which won’t deliver genuine improvements to the culture and behaviour of banks, according to the Finance Sector Union (FSU).
The union, representing the bulk of workers in the financial services and banking industry, has told the Senate Economics Committee inquiry into the Major Bank Levy Bill 2017 that while it supports a fairer and more progressive tax system, focusing on a single industry to address a short-term fiscal deficit would not strengthen the Government’s ability to provide the high-quality public services and social security that Australians wanted, needed and deserved.
“The finance industry has, by its own admission, lost the trust of the community through their actions,” the union submission said and acknowledged that “a levy on the banks may be seen to be a punitive measure by Government that is welcomed by the community”.
However it added: “The FSU is of the opinion that this is an ‘all fizz, no pop’ policy that won’t deliver genuine improvements to the culture and behaviour of banks towards the community at large”.
The union said one of its major concerns about the levy was that it would create an excuse for the banks to implement a round of job cuts.
“It has been widely reported that this levy is likely to be passed down to shareholders or customers through either smaller dividends or increased interest rates and fees, however it is of particular concern of the FSU and its members that employees will bear a significant brunt of any cost savings driven by the introduction of this levy,” the submission said.
“One of the less acknowledged contributions of the Australian finance industry is its significant contribution to the employment of Australians. The ADI’s subject to this levy employ in excess of 125,000 employees,” it said. “In an industry that is rapidly changing, with the jobs of today unlikely to be the jobs of tomorrow, it is our concern that this levy will provide an excuse for job cuts that are even greater than those already forecast. This will detrimentally impact the fair contribution the government seeks from the Bill.”
