The 2017 state budget handed down in the Parliament at the end of June included another new tax, a levy on the five major banks with which the government plans to raise $370 million over the next four years.
Last week the state Liberal opposition took a position opposing the tax in the lower house, which in turn will lead to the unprecedented step of moving to block the government’s proposed state bank tax in the upper house. To be successful in this, we will need the support of the cross-benches.
South Australia has a long held convention of allowing a government to pass its budget - although we successfully blocked the Adelaide city carpark tax in 2014, having publically indicated our opposition to it in the lead-up to that year’s election. The convention of allowing governments to pass their budget in full, does not exist in the Federal Parliament or in the Victorian Parliament, for example. To break this South Australian convention is significant and not something to be done lightly.
It’s important to point out that there are in fact two bills that make up the budget. The first is the Appropriation Bill, the second is the Budget Measures Bill. The state bank tax is contained within the Budget Measures Bill. What this means is that we can potentially block one part of the budget measures and allow the rest to pass, enabling the government to continue with its business.
Although the federal government last year imposed a levy on the five major banks, we felt the situation was entirely different at a state level. Admittedly, the South Australian economy is struggling, with unemployment remaining stubbornly high (at 6.9 per cent it is the highest in the nation and has been for the past 30 months consecutively) and high taxes on businesses, households and individuals.
In the end, for us as the state opposition, it wasn’t about the banks but rather the people of South Australia. We believe a tax such as this would act as a disincentive to investment, would more than likely be passed on to bank customers, and send yet another signal to all and sundry that South Australia has a high taxing, high spending fiscal environment.
It will be interesting to see how this plays out over the coming weeks and months. There is even an outside chance, although unlikely, that this issue may bring the state to an early election.
Member for Flinders