Secretary to the Treasury has shot down claims from the Australian Bankers' Association that the proposed bank levy disregards Government best practice guidelines.
In a submission to Treasury lodged on Monday, ABA chief executive Anna Bligh claimed the lack of a regulatory impact statement is in direct opposition to the Government's own guide to regulation, stating: "The Government has failed to meet its own criteria around transparency and accountability in decisions, evidence-based policy development, and effective administration of regulation."
Responding to Bligh, Secretary to the Treasury John Fraser said a regulatory impact statement would be made available when the draft legislation is tabled, citing the inclusion of the levy in the Federal Budget followed thorough development as part of normal budget processes.
"Through those processes, careful consideration was given to the design of the levy, the costings and to its effect on the economy as well as the financial sector," Fraser wrote.
"As is usual practice we will be providing further relevant information including a regulatory impact statement canvassing the broader economic impacts, compliance issues and revenue estimates as part of the explanatory material accompanying the draft legislation when it is introduced into Parliament."
Bligh said a lack of quality consultation on the shaping of the levy could result in a poorly-designed tax impacting the finances of both the nation and everyday Australians.
"Further Treasury analysis is imperative, including on the modelling of the economic impacts of the tax, and banks should be given at least four weeks to respond to the Treasury analysis, the draft legislation and explanatory memorandum," Bligh said.
"A longer consultation period, including engagement between banks and all affected regulators, will help to avoid unintended consequences on the economy and financial system."
In response, Fraser pointed to Budget papers outlining revenue and expenditure decisions.
Fraser assured the ABA that, given the tight deadline imposed, his department is working with the Office of Parliamentary Counsel to prepare draft legislation as promptly as possible for the major banks to comment on.
NAB also released its submission to Treasury this week, staunchly opposing the levy.
"NAB believes the levy is poor policy and, accordingly, does not support it. The levy is not just on banks, it is a tax on every Australian who benefits from, and is part of, the banking industry. This includes NAB's 10 million customers, 570,000 direct NAB shareholders, those who own NAB shares through their superannuation, our 1700 suppliers and NAB's 34,000 employees. The levy cannot be absorbed; it will be borne by these people. It is not possible to increase taxes by this magnitude without it impacting people," the submission reads.
NAB stated its most obvious areas of concern are the calculation burden of the levy and the application of a clear disadvantage against global competitors in wholesale and institutional banking.
"NAB also expects that given the significance of the change and time allowed for consideration, there will be other consequences we have not currently identified," the submission stated.