Banks take stand on Turnbull levy

BANKS FIGHT BACK ON LEVY

The five major banks all oppose the $6.2 billion levy as bad policy. But they have offered some advice on it.

* WESTPAC. Apply levy to foreign banks as well. Sunset clause of 2021. Narrow the liability base. Suspend levy if banks come under financial stress. Levy will need to be passed on to customers or shareholders.

* ANZ. End levy when budget returns to surplus. Levy should exclude offshore activities of domestic banks, but include foreign banks. Review is needed into how the levy could undermine liquidity of banks. Government should consider whether levy amounts to "double taxation" on liabilities.

* NAB. Levy undermines Australia's attractiveness for investment. Estimated cost to NAB of $245 million post-tax annually. Sunset clause and waiver for stressed banks needed. Should capture global international banks operating in Australia. Review needed within 18 months of operation.

* CBA. Levy creates disincentives for banks to build liquidity and funding buffers. It also undermines confidence of stakeholders, including global funders. Sunset clause when budget hits surplus. Should be extended to "very large foreign banks active in Australia". Review levy within two years.

* Macquarie. Levy will increase cost of its products and make it less competitive. Macquarie is "not a major bank" and threshold level should be increased. Exclude foreign operations of Australian banks. Exclude some "non-funding" liabilities. Remove minister's power to change definition of liabilities.

(Source: Submissions to Senate inquiry, tabled June 15, 2017)