There is an idea that runs through literature that goes like this – if you want to create a simple and compelling narrative then you need to create a monster, because monsters make hating, battling and fighting easy and they create heroes.
Creating a monster isn’t a new idea. Think the Bible and Satan; think Beowulf and the Grendel; think even Police Chief Martin Brody and the shark in Jaws.
Scott Morrison and Malcolm Turnbull have chosen their monster in this budget. It’s the banks. Specifically CBA, ANZ, NAB and WBC – oh and last, as an afterthought, Macquarie.
In the latest budget they levied the banks; adding a 0.06% fee on liabilities, which means all bonds and deposits above $250,000, and raising $1.5 billion a year in new revenue from the sector.
Make no mistake – this isn’t really a levy. It’s a super profits tax masquerading as a levy, masquerading as a regulatory change. Its none of these things. It’s a tax; it will be passed on to consumers and it will be (very mildly) inflationary.
Make no mistake (take 2), a new charge of 0.06% on the liabilities and deposits is the thin edge of the wedge. The Government has a new toy to play with in terms of raising taxes on banks and consumers – you should expect that to go up and down every year depending on the economic zeitgeist.