The Greens will require the big banks to pay a fairer share towards the NSW economy.
Banking is an essential public service. Providing services for people, not creating corporate profit, should be at the heart of Australia’s banking sector. Yet, while bank profits continue to soar, increasing numbers of people in NSW are struggling to make ends meet.
Coalition and Labor governments have allowed the big banks to run rampant at the community’s expense. They have accumulated mega profits and paid outrageous salaries to CEOs and upper management. As the Royal Commission has confirmed, the big banks have failed the community with unethical behaviour and greed.
OVER $500 MILLION EXTRA PER YEAR TO IMPROVE THE LIVES OF PEOPLE ACROSS NSW
The banks consistently earn profit margins that are far larger than normal, thanks to government protection and their dominant market position.
While bank profits have continued to increase, economic inequality in Australia has widened, wages have flatlined, and household debt has skyrocketed. In Sydney, the top 20% of income earners have an income that is more than five times higher than those in the bottom 20%.
The Greens will require the big banks to pay a fairer share towards the NSW economy. The Levy will raise over $500m per year – a tiny amount in the hands of the banks compared to their annual mega profits, but a huge amount in the hands of communities to spend building and improving schools and hospitals and creating jobs.
BY EXCLUDING THE SMALLER BANKS, THE LEVY WILL ENCOURAGE A MORE DIVERSE AND COMPETITIVE BANKING SYSTEM
Due to a lack of competition in Australia’s banking sector, Australians are at the mercy of the big banks when it comes to interest rates and fees. This has a real impact on our everyday quality of life, meaning we have less to spend on the essentials necessary for a good life. Greater competition from community-owned and not-for-profit banks is needed to break the unhealthy oligopoly of the big Australian banks.
The Federal Major Bank Levy represents only a modest step towards improving competition and is small by international standards given the systemic importance of the major banks to Australia’s economy. Even if the supplementary bank levy was to be replicated in every other state, it would still represent a tiny share of bank assets, gross revenue and before-tax profits.
With the Levy increasing the major banks’ cost of funds, a more level playing field will be created for competitor banks, such as community-owned and not-for-profit entities. The increased competition will bring costs down and reduce the market share, and systemic importance, of the big banks.
NSW’s share of the national economy is approximately 33%. Imposing a Supplementary Banking Levy on the business banks conduct in New South Wales, at the same rate as imposed at federal level, could raise over A$500m every year.
The money raised can be used to improve the lives of NSW residents, who have been hit hard by increasing cost-of-living and household debt and stagnant wages.