Following the CBA’s posting of another record profit, the Greens today said they would use their position in balance of power in the new Senate to push for a new levy on the big four banks and a banking Royal Commission.
Too Big to Fail Levy
Greens Treasury spokesperson Adam Bandt MP said today’s record profit from the Commonwealth Bank demonstrates that the big four can afford to pay for the implicit support they receive from the government. Banks considered ‘too big to fail’ receive implicit government backing worth billions of dollars a year, giving them an advantage over their smaller rivals, according to the International Monetary Fund.
Earlier this year the Parliamentary Budget Office estimated that a ‘Too Big to Fail Levy’ of 20 basis points on bank assets in excess of $100 billion, as proposed by the Greens, will bring in almost $15 billion of much-needed revenue over four years.
“The Commonwealth Bank has again posted a record, multi-billion dollar profit, due in large part to implicit public support,” Mr Bandt said.
“If the big banks get into trouble, it is assumed the government will step in and bail them out. This allows the big four to borrow more cheaply and gives them an advantage over their smaller competitors."
“It’s time the public got something back for supporting the big banks.”
“The Greens are in balance of power in the Senate and we will push for fairer ways to raise revenue to fund the services Australians expect.”
“A Public Support Levy’ on the big four banks would bring in billions of dollars of revenue for our schools, hospitals and infrastructure.”
"As a levy would only be imposed on the larger banks, competitive pressures would stop them from passing it on to customers."
Greens Finance spokesperson Senator Peter Whish-Wilson said, “It was the behaviour of Commbank with their continuing financial advice scandals that first precipitated the Senate’s call for a Royal Commission. Commbank has a lot to fear from a banking Royal Commission.”
“In the ASIC Senate Inquiry that mainly focussed on Commbank, it was clear that an Inquiry with proper coercive and investigative powers would have uncovered so much more. We need a Royal Commission now to make sure that banks like Commbank never act so recklessly again.”
“The Greens were the first party to broaden calls for a Royal Commission to the other banks, and the only party to put forward a full Terms of Reference into what the Royal Commission should examine. This needs to include the role of political donations, CEO and executive pay structures, separating retail banking from financial advice and penalties for white collar crime.”
“Clearly the fines and penalties that Commbank paid for their repeated scandals are barely a rounding error on their annual profits and we need to think of stronger measures that pull them into line.”
Adam Bandt – Adam Pulford, 0429 109 054
Peter Whish-Wilson – Tim Beshara, 0409164603