The five major banks are banned from consulting with their boards, customers or shareholders prior to the implementation of legislation around the new bank levy.
In what the Australian Bankers' Association has labelled an extraordinary move, the Federal Government yesterday forced senior bank executives to sign a confidentiality agreement before releasing draft legislation documents for examination.
ABA chief executive Anna Bligh said the banks were shocked, with the Government now making it illegal for the Bill to be tested in the public sphere.
"The Government is going to extraordinary lengths to keep this tax hidden from the people who will be most affected by it and from the public," Bligh said.
"How can Australia's major banks determine the impacts of this legislation if their senior staff and analysts are in danger of being prosecuted if they speak to stakeholders, the public or the media?"
Bligh said the bad tax has now become a secret tax - one that will raise more than $6 billion over the next four years and profoundly impact the banking sector, customers and shareholders.
"A totally unacceptable public policy process has gone from bad to worse. This is likely to lead to highly flawed legislation and further risks unintended consequences on the economy and financial system," Bligh said.