Banks will funnel billions of dollars from a new deposit levy directly into government coffers and finance industry executives will be targeted by a stricter accountability regime in measures announced in Tuesday’s federal budget.
With the government continuing to resist calls for a royal commission into the big banks, the Turnbull government also announced that executives would lose their bonuses if they fell foul of the new regulations.
In his budget night speech, Treasurer Scott Morrison said there needed to be greater competition and accountability “for the system to be fairer”, but it remained to be seen whether the measures would nullify the ALP’s advantage on the issue.
Over the next four years, the banks will pump $6.2 billion directly to the government, money that has been earmarked for budget repair.
“This levy will only affect our five largest banks [Maquarie plus the big four] with assessed liabilities of $100 billion and does not apply to superannuation funds or insurance companies,” Mr Morrison said.
“Unlike the previous bank deposit tax, this is specifically not a levy on pensioners and others’ ordinary deposit accounts, nor is it on home loans.”
Highly-paid bank executives will also need to be registered with the Australian Prudential Regulatory Authority. If they breach the new rules, Mr Morrison said “they can be deregistered and disqualified from holding executive positions, and be stripped of their significant bonuses”.
The Treasurer also confirmed the establishment of a “one-stop shop” for complaints about the banks.
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Called the Australian Financial Complaints Authority, Mr Morrison said the new body would allow “Australians to resolve their disputes and obtain binding outcomes from the banks and other financial institutions”.
Banks which breach the new misconduct rules will also be hit with hefty fines. The budget papers showed the fines would start at $50 million for small banks and $200 million for large banks.