Given the small percentages involved, South Australia’s bank levy won’t interfere with the federal government’s levy, and would arguably be compatible with it.
Applying the GST to bank products and services would increase costs for consumers but reduce distortion in our economy.
Sergio Dionisio/AAP
Kevin Davis, Australian Centre for Financial Studies
Applying the GST to banking has much sounder economic underpinnings than the current levy, would have raised much more revenue, and would have applied to all banks rather than just the big banks.
The banks modelling on how much revenue the government will collect from the levy assumes the banks will do nothing in response to it. This is highly unlikely.
Joel Carrett/AAP