Senate debates

Monday, 19 June 2017

Bills

Major Bank Levy Bill 2017, Treasury Laws Amendment (Major Bank Levy) Bill 2017; In Committee

9:07 pm

Photo of Nick XenophonNick Xenophon (SA, Nick Xenophon Team) Share this | Hansard source

I would address some of the arguments put forward by Senator Whish-Wilson, who made reference to the attitude of the smaller banks. When I put the question of foreign banks to Mr McPhee, the CEO of ME Bank, he said in evidence:

But what I believe is that we should have a level playing field and therefore if it can be clearly demonstrated that the foreign banks are getting an advantage, and it might be a rulings advantage from wherever they are domiciled et cetera, then I think the levy should also apply to levelling the playing field and making everyone able to compete fairly.

I think this is an argument. I do not accept many of the arguments of the big banks as to why they should not pay the levy, but I accept this argument as to why foreign banks should pay the levy. The foreign banks in question compete with the big banks mainly in corporate lending—not so much in retail lending. They are already more competitive than the Australian majors, because they borrow in their home markets where interest rates are often zero or close to zero. That will see those big foreign banks that operate and have a significant presence in this country gain a competitive advantage over Australian banks. If you look at the total assets on the consolidated balance sheets—they are not at the same time as the balance dates are not all the same, given that some of these are overseas banks—the approximate foreign currency figures, by comparison, are: Westpac, $840 billion in consolidated balance sheets; CBA, $972 billion; NAB, $790 billion; ANZ, $897 billion; Macquarie, $167 billion; HSBC, $3.29 trillion; ING, $1.2 trillion; and BNP, $2.6 trillion, I say that, insofar as they are liabilities here in Australia, that should be subject to the levy. I will not push it any further as I know it does not have the support of most of my colleagues in this chamber, but I think it is an important principle. I would ask Senator Cormann a final question on this: if it is demonstrated that this is giving a competitive advantage to the major foreign banks, such as HSBC, ING and BNP, is that something the government will be monitoring and taking appropriate advice on?

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