Australia’s five major banks have been told they must sign non-disclosure agreements before the Turnbull government hands over details of its new $6.2 billion bank levy.
In a move that underscores how concerned Treasurer Scott Morrison’s office is about the politically sensitive tax on the major banks, Treasury has told the big five – Commonwealth, Westpac, ANZ, NAB and Macquarie Group – they must promise not to release any details of the draft legislation publicly.
Fairfax Media has confirmed banking officials are furious with the government’s secretive approach to the new laws.
But Mr Morrison hit back late Wednesday, promising once the new laws were finalised they would be introduced and “open to the full scrutiny of the Australian Parliament” in the next sitting fortnight.
“The major banks have made individual submissions to the government and we are respecting requests made for confidentiality of submissions, including any subsequent comments they may provide. It’s a two-way street,” he said.
Former prime minister Tony Abbott weighed into the debate, offering sympathy to banks and declaring them “an easy target”.
“I can certainly understand the banks fighting back, why wouldn’t they?” Mr Abbott told Sydney radio station 2GB. “But on the other hand the government has brought down a budget, the last thing the government can do is see the budget unravel within a couple of weeks of it being brought down.
Like the Rudd government’s original mining tax, the major institutions claim the bank levy has been designed without adequate consultation and will not work in its current form.
They have also warned the cost of the levy will be passed on to mortgage holders and shareholders – a move the government has dismissed as unnecessary.
The non-disclosure agreements have to be signed by each individual who needs to see the legislation – which could be as many as 30 or 40 people across the country and around the world – which would curtail the external advice banks can receive on the proposed laws in the 24-hour time frame.
Australian Bankers’ Association chief executive Anna Bligh told Fairfax Media on Wednesday that “a bad tax has become a secret tax”.
“This confidentiality agreement means that this draft legislation is being kept from the public, the media, the Parliament, customers, shareholders and boards. This is no way to get legislation critical to the wellbeing of our financial sector right,” she said.
“The fear among major banks, that this tax was cooked up in the Treasurer’s office with little or no thought as to the knock-on effects for every Australian who banks with a major bank have been further fuelled by the Treasurer’s insistence on secrecy.”
One well placed source at a major bank said this was the first time Treasury had asked the organisation to sign a non-disclosure agreement.
But Mr Morrison said non-disclosure arrangements were “not an irregular practice for the government when consulting with commercial entities over draft legislation” and had been used recently by the Turnbull government for its multinational tax crackdown.
“The bank levy measure has been well considered over many months and after announcement in the budget we are now in a position to undertake this final consultation,” he said.
The requirement not to disclose information about the draft laws is understood to apply until the legislation is introduced to Parliament.
The 0.06-percentage-point levy will rake in an estimated $6.2 billion over four years and banks fear it could be raised in the future.
John Roskam, the executive director of the Liberal leaning Institute of Public Affairs, said the decision to enforce a non-disclosure agreement was “an abrogation of the rule of law”.
“The idea that they can’t get advice is fundamentally bad policy, it’s an embarrassment, the process is a disgrace. If Labor had tried a stunt like this the Coalition would call them to account.”
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