Monday, 19 June 2017
Major Bank Levy Bill 2017, Treasury Laws Amendment (Major Bank Levy) Bill 2017; Second Reading
I rise today to speak in support of the Major Bank Levy Bill 2017. I take this opportunity to speak in support of this bill with a degree of pride. This was something that the Greens proposed many years ago. It was something that the Greens put forward as a solution to the nation's revenue problem. It was a solution that we put forward at a time when we were told that there was no prospect of a levy on the big four banks being passed. Yet, like so many other areas of public policy, we have seen the Greens lead the debate and take an issue that was rejected by both of the old parties—and, indeed, by the political establishment—and, sure enough, we see it adopted and now being put forward as a measure by this government.
The reason the Greens first proposed this bank levy is, firstly, we need to recognise that if we want to fund schools and hospitals, if we want to fund a social welfare system, if we want to fund all of the foundations that we believe are the pillars of a decent society, then we need to raise revenue. We can do that in a number of ways. We can do that through our progressive income taxation system, which is why we have continued to support, for example, a tax on millionaires. It is why we support a buffer tax, a tax that says, 'If you are a millionaire we think that you should pay some tax,' and that means putting a floor on the amount of tax that people on high incomes can pay—in this case, a 30 per cent floor. It is why we support increased measures to deal with multinational tax avoidance—again, another area of public policy where the Greens lead the charge and we have now seen some action from all sides of politics.
We proposed the levy on the big four banks because they are a part of the Australian economy that makes record profits and benefits from an implicit taxpayer funded guarantee. Again, if we look at the big four banks, in profits last year alone, we are talking about $30 billion. We have the most profitable banking sector anywhere in the world. If we do not raise money from the big banks, we know that the other choices that governments make are cuts to revenue that affect ordinary Australians. We know that this government has proposed to cut funding for services and also to look at taxation measures that will affect the most vulnerable Australians. So, it is, as I said, with some pride that we stand up to say that, when a banking sector receives billions of dollars in an implicit taxpayer funded guarantee—something that gives them an advantage over their smaller rivals—it should be forced to front up for the guarantee that it receives.
We know that it has taken a while to shift the government on this, but we are pleased that ultimately they came to the table. It is good to see them recognise sound economic policy from the Greens—well done. Soon, we hope, they will come to adopt some of our other revenue proposals: reforms to negative gearing and capital gains tax, making sure that we end the big rort that is cheap fuel to the mining industry and, as I said, some of those issues around our progressive taxation system.
The banks say that they are prepared to pass on costs to consumers; they are going pass on these costs. The first thing to remember when we are talking about the raft of financial products available is that they are skewed disproportionately to those bank consumers who are on higher incomes. So, if this levy is passed on, it will be passed on to people on higher incomes. But just a word of caution to the Greens: when my colleague Senator Peter Whish-Wilson last week in the chamber put forward a private member's bill that would establish a parliamentary commission of inquiry into the banking sector, we saw that bill pass the Senate. We had what occurs very infrequently in this place—a private member's bill pass the Senate. Now we know that it is being dealt with in the House. The banking sector should know that what it has hanging over its head is the threat of a parliamentary commission of inquiry or, indeed, a royal commission. I suspect that, should this legislation proceed through the House, before it comes to a vote the government would have no choice but to support a royal commission into the banking sector. That is what faces the banking sector if it proceeds with not absorbing some of these costs, not taking the record $30 billion in profits that it made last year and recognising that that should make some contribution to this bank levy. We know that the bank CEOs are receiving enormous bonuses; they are published regularly. Australian consumers now know that our banking CEOs are basically the beneficiaries of a combined total of $300 million in bonuses, commissions and salaries for last year alone—$300 million. Here is a tip to banking CEOs: how about leading by example? How about recognising that it is an opportunity to forgo some of those enormous bonuses they receive and ensuring that they, rather than the mums and dads who use banking services, shoulder some of the burden and demonstrate that the big end of town is prepared to do some of the heavy lifting?
The bottom line is this: we are having debates in the chamber this week about how we fund our public education system. We have legislation in the form of a Medicare Guarantee Bill. The way you guarantee Medicare is not by some accounting trick, not by setting up a special bank account that does nothing to guarantee Medicare. You guarantee Medicare by funding it, by making sure that you raise the revenue to fund it. We believe that the fairest and most equitable way of doing that is to ensure that the most profitable industries in Australia do their fair share. This is why the banking sector needs to recognise that, as one of the most profitable sectors in the world—
Proceedings suspended from 18 : 30 to 19 : 30
Just to conclude, what we have here is one of the most profitable industries in the country, with record profits. We had bank executives making $300 million in bonuses last year alone. We have an industry that gets a taxpayer funded guarantee—the too-big-to-fail guarantee. There are not many businesses like it. If things go badly, the taxpayer stumps up the cash. If things go well, the banks cream it off in record profits. It is appropriate that the banking sector do its fair share.
If we are going to pay for schools and hospitals, if we are going to pay for welfare and if we are going to pay for all the things that we think are the foundations of a decent society, then it is fair and just that the banking sector contribute to the prosperity of this nation. That is why the Greens led the charge for the establishment of a bank levy on the big four banks. It is why we are now pleased to see that our policy has been adopted by the government, and it is about time we see the government move on some of those other key areas that we have long argued need to be reformed, such as negative gearing to end the huge taxpayer funded handout that goes to people not to buy their first home but to buy their third, their fourth or their fifth home; capital gains tax reform, again for the same reasons; ending the huge subsidy that goes to the fuel industry; and having a Buffett rule so that millionaires actually start paying their fair share of tax. It is only by recognising that we have to raise revenue to fund the things that Australians want and deserve, like Medicare and a well-funded public education system, that we will begin to make the progress we need to make towards a fairer and more decent society.