ABA welcomes rejection of global bank tax

The Australian Bankers’ Association (ABA) has praised the Federal Government for rejecting the global bank tax proposed at the G20 summit in Canada over the weekend.

“We are pleased that the Treasurer, Wayne Swan, was able to look after Australia’s national interests by opposing a global bank tax, which would have put the brakes on Australian economic growth,” said ABA chief executive Steven Münchenberg.

He said the global bank tax is not appropriate for Australia, where the banking system weathered the global financial crisis and continued to lend.

“This is in stark contrast to the experience in the US, UK and parts of Europe, where some banks collapsed, others were nationalised and economies experienced sharp downturns resulting in recessions,” Münchenberg said. He added that those in favour of the tax were those “where banks had real problems”.

“These countries are taxing their banks because they had to use taxpayer money to bail out the banks, unlike Australia, Canada and other countries,” he said. “Taxpayer money was not used to bail out Australian banks. In fact, Australian banks and other lenders have so far paid around $1.1 billion for the use of the Government’s wholesale funding guarantee and will pay more than $5 billion over its full life.”