What’s In A Name – A Letter to the Treasurer

Dear Treasurer Morrison,

Please just end the charade and give your “bank levy” the name it rightly deserves – the Banking Services Rent Tax (BSRT).

Much like the effort of one of you predecessors, the Hon. Wayne Swan, who introduced the Mineral Resources Rent Tax (MRRT), your BSRT has not been subject to prior consultation, has limited policy foundation and is aimed at nothing more than raising tax revenues.

It is mostly likely an idea from the same people who came up with MRRT and who think Australian banks are too profitable.

Robert Carling from the Centre for Independent Studies summarises it neatly:

The levy encapsulates the twin themes of the budget: hunger for more revenue and a craven appeal to populism.

Sounds familiar no?

Please treat we the citizens with the respect we deserve and just say this is a revenue measure.  It is not a Swanny “savings” and it is not budget repair because, there is no repairing this budget.

And whilst there may be some delightful schadenfreude in that the NAB will be hit and it is Chaired by Ken Henry AC, the brains behind the MRRT, the delight won’t last long.  This tax will be passed on to we the savers, borrowers and investors (including superannuants).

Congratulations Treasurer Morrison.  You have just had your own “go early, go hard, go households” moment.  Welcome to the pantheon of Labor Treasurers.

Yours depressed,

Spartacus

This entry was posted in Uncategorized. Bookmark the permalink.

57 Responses to What’s In A Name – A Letter to the Treasurer

  1. Tim Neilson

    The problem is, Spart, you’re one of a tiny minority mentally competent enough to understand this, and ScoMo knows this.

    The average punter is overjoyed that “the banks” will pay this, oblivious to the fact that a “bank” is a legal fiction existing only in the artificial world of the Corporations Act and that the only entities that can really bear the incidence of tax are individuals (in this case anyone whose super fund holds bank shares, anyone with a bank account or a variable rate loan, and anyone employed by or providing services to a bank).

  2. kc

    Whole thing is absurd. Who owns the banks. Shareholders. Who pays. Rotten wicked rich shareholders, like, err, Industry super funds and self funded retirees and small, medium and large investors who get the distributed profits via dividends (franked after company tax of course). So either they pay the tax increase, via reduced returns,or, borrowers pay the tax increase so shareholders still get the same returns. The “Banks” don’t pay because they are not some individual private rich (white) bastard, they are public companies. I know ‘we” all understand this point but why the f#@k can’t someone point this out to the media and all the punters whose super funds are invested in bank shares, and yet are cheering on the “get the banks” rhetoric? Dumb, just plain straight out dumb; and I don’t even own bank shares or have a mortage.

  3. Tim Neilson

    PS, how about:
    “Dear ScoMo,
    I was just looking through the 2009 Johnson Report on how to grow Australia’s financial sector into an international financial centre, and I couldn’t find the recommendation that we impose a 6 basis point handicap on Australia’s big banks compared with their foreign competitors. Can you give me the reference please?
    Regards
    Tim Neilson (major bank shareholder, taxpayer and former Coalition voter)”

  4. H B Bear

    I’m guessing Morriswan had Born to Run oh high repeat during the Budget preparations too.

  5. Botswana O'Hooligan

    Diabolically clever of the treasurer for he is getting at we punters via a tax on the banks and the punters will blame it all on the banks as usual little knowing that the banks will get a tax deduction (I think) and will pass the costs on to the punters so that the banks are really in a win/win situation much to the delight of we shareholders. Little do Morrison or turnbull know that by slapping this tax on the banks they are sending a message to every other business as in “you might be next.” What a great way to drive the final nails into the Liberal party coffin. Marx and Lenin would approve for this is straight out socialism.

  6. candy

    Clever politics. A bank tax to appeal on the basis of greedy banks/CEOs who deserve to be taken down a peg or peg to appeal mostly to the Left.
    and drug testing people applying for New Start to appeal to the Right.

    I understand there’s no detail on either policy, but that’s not the aim. The aim is get that Newspoll up, so … clever politics.

  7. Robber Baron

    A government that is powerful enough to demonize you and tax you specifically, is a government with too much power.

    Do not give up your guns…you may need them.

  8. john constantine

    How about cutting the cost of banking with a robot software, artificial intelligence “Uber-Bank”.

    Dont even care if the government owns it.

    The average prole now hates the banks so much that they would happily move their accounts to a self-aware Skynet banking corporation.

  9. .

    Good call. There is no turning back. MT and SM are ALP in drag.

  10. .

    The average prole now hates the banks so much

    They have no reason to, other than believing the ALP and union bile that is spewed each time they announce a profit.

    The average prole is a non-net taxpayer and so what interest do they have in deposits?

  11. Rabz

    Born to Run …

    … out of other peoples’ money.

  12. Empire

    Dear Treasurer Morrison,

    I’m not sure common courtesy is appropriate given the circumstances.

    “Dear Marxist Sleeper Agent and Traitor to Liberal Values” would be more appropriate.

  13. Luke

    How about just enforcing the law that any amount above the reasonable cost of doing something is not a fee but a penalty. Regardless of interest rates, the Australian banks didn’t start making these massive profits until governments from the 90s on let them add an ever increasing amounts for fees at a time when computers and electronic transactions were increasingly reducing their costs and adding to their income.

  14. I am Spartacus

    Dear Luke

    until governments from the 90s on let them add an ever increasing amounts for fees

    Is it your position that governments should control the prices charged by banks or by all Australian businesses – Venezuela style?

  15. JB5

    It’s all about the shekels isn’t it? It’s ALWAYS about the shekels.

  16. NewChum

    Luke….use the force mate, and turn away from the empire.

  17. Tim Neilson

    Luke, Australian banks aren’t actually abnormally profitable by world standards. The profit numbers are big because the total funds invested (shareholders’ funds and the banks’ indebtedness to others) are gargantuan.

    But more importantly, banks don’t exist. They are a legal fiction. Profits belong to shareholders, most of whom are individuals via their super funds. If you want to advocate for ordinary Australians to get bashed and robbed by kleptocrats go ahead, but at least be aware that that’s what you’re doing.

  18. Mother Lode

    Sadly, bankers have long been depicted as brutal and cold monsters who beguile and entice the unwary into taking massive loans – and before the signatures in blood have dried, they pounce on the hapless naifs.

    Boo. Hissss.

    Young ‘uns want better houses than they can safely afford, take on so much that they only have enough left to just get by (this is already the fault of the bank), and then, when there is a hiccup in interest rates, think the bank is victimising them.

    It really is not a terrible thing, or a thing to be ashamed of, two be living in a 2 bedroom fibro house in the suburbs for your first couple of kids. A surprising number of fond memories can born in such places.

  19. Faye

    Was Australia once working towards being a financial hub in this corner of the world? What happened to that?

  20. RobK

    Sparty,
    I think your letter encapsulates the essence of what’s going on very well.
    Thanks.

  21. RobK

    Further, there is no repairing the budget or the actual economy unless the RET is abandoned. There’s a lot of ground to make up to get us back to the relative position were before the CO2 caper started. I can’t see any other viable work-around.

  22. RobK

    Oops, where we were before…

  23. Andore Jr.

    Morriswan

    HAH I love that. Shane Morriswan.

  24. Fulcrum

    Cheer up Spartacus.

    Apart from a media which constistently leans horizontally to the left, nothing is forever.

    Intentionally, through their limited appeal, Fairfax is actively pursueing lower standards and it has to be admitted ,they are meeting with considerable success.

  25. Rohan

    I notice that Goldman Sachs have been made exempt from this bank tax. The question has to be asked: Is that mates rates Morriswan and Malcontent?

  26. Peter

    Let’s vote 1 for ScoMo – greatest living Labor Treasurer.

  27. PeterF

    You were too kind to him.

  28. .

    But more importantly, banks don’t exist. They are a legal fiction. Profits belong to shareholders, most of whom are individuals via their super funds. If you want to advocate for ordinary Australians to get bashed and robbed by kleptocrats go ahead, but at least be aware that that’s what you’re doing.

    Sure they exist. Corporations are real. They exist because the government forced large partnerships to incorporate in the late 19th century.

  29. .

    It really is not a terrible thing, or a thing to be ashamed of, two be living in a 2 bedroom fibro house in the suburbs for your first couple of kids. A surprising number of fond memories can born in such places.

    Pendle Hill is a shithole in my opinion. I searched for a 2 br house in Pendle Hill and looked at the first fibro that came up

    http://www.realestate.com.au/property-house-nsw-toongabbie-125365702

    12 Bond Avenue Toongabbie NSW 2146

    $829,950

    It is on less than 600 sq m.

    No shame at all, except you need to have a deposit of around 42k plus PMI and have an income of 123,000 with no other expenses or children – at a minimum from the most aggressive lenders.

    You need a couple with two professionals or a professional with several years of work experience, a FIFO miner or so on – and no kids or other financial commitments.

    Hard to see how you’re going to raise a family like that never buying a new car, cash only, or how often they’ll see either parent.

    How that is all going to work out with rising unemployment…?

    No shame, but the price is too damn high.

    About 40% of the price of old housing stock and 45% of the price of new stock is tax. That has got to change.

  30. Tim Neilson

    Sure they exist. Corporations are real.

    So you believe that it’s possible for a “bank” to bear the cost of the bank levy without individuals losing out, a la ScoMo’s assertion that the banks should “absorb” it? If a bank is “real” presumably that can occur?

  31. .

    I don’t think the legal personality of a bank changes the analysis of the burden and incidence of taxation.

  32. Cary

    new compassion agendas

    Is compassion an agenda so much or more an innate human quality. Category error methinks to call it an agenda, with its pejorative associations.

  33. Cary

    It is on less than 600 sq m

    600 sq m is quite a lot of land. In most parts of the world you could have quite a few people, much more than a single family – living comfortably there with all essential needs met.

  34. .

    600 sq m is quite a lot of land. In most parts of the world you could have quite a few people, much more than a single family – living comfortably there with all essential needs met.

    Are they going to pay more than four-fifths of a million Australia dollars for the pleasure?

  35. Tim Neilson

    Dot, “legal personality” is just a phrase used to summarise certain aspects of the way in which the law deals with some collective activities conducted by some individuals (officers, employees, contractors, perhaps operating through a variety of legal forms) on behalf, ultimately, of other individuals (as direct shareholders or as the ultimate investors maybe through a variety of legal forms).

    By way of analogy, the government could no doubt legislate to recognise the 57 (or however many we’re now up to) new “genders”, but that wouldn’t make them real.

    Sure, the actual rights and obligations of the underlying individuals emanating from the legal fiction (e.g. limitation of liability of shareholders) are “real” in a sense, but using a convenient label like “legal personality” isn’t (or shouldn’t be) the same as asserting a supernatural doctrine like transubstantiation.

  36. Tim Neilson

    Category error methinks to call it an agenda, with its pejorative associations.

    Methinks the phrase “compassion agenda” was intended to be pejorative, and there’s no category error in the view that an agenda can be intended to advance real or apparent compassion.

  37. Cary

    Methinks the phrase “compassion agenda” was intended to be pejorative, and there’s no category error in the view that an agenda can be intended to advance real or apparent compassion.

    Sure there can be agendas that seek to encourage compassion but implying that is something bad by using deliberately pejorative terminology in a way to discredit that agenda is a category error since compassion is good, not bad, and one of the best and most important things about human capability.

  38. .

    Bank shareholders aren’t allowed to be a partnership, banking regulations demand incorporation, the Partnership Acts declare partnerships over a certain size cannot stand.

    We can’t blame banks for their status.

    Of course, however, the shareholders and customers will pay. The supply and demand for banking services are neither perfectly inelastic.

    Unless we’re like that hapless guy Uncle Milt schooled…”why can’t the government pay?”.

  39. Caveman

    Writing a letter is a sign of weekness. Get with the times employee an army and have that message personally delivered.

  40. Snoopy

    The Bankers Association wasn’t consulted after appointing a failed left wing former ALP premier as their CEO? That’s a real head scratcher.

  41. Ubique

    Ken Henry AC, the brains behind the MRRT …

    Ken Henry AC, the imbecile behind the MRRT …

    FIFY.

  42. Gary

    I think banks in particular are an excellent example of an industry that does not add value to the extent it charges its customers for lending their money to them and them lending it to other people/businesses intent on making money out of money and not adding any actual “value” to society. The size of their profits is directly proportional to the excess fees, charges and interest rates they impose which directly adds to the cost of products and services actually delivered to the community. It is the same as directly taxing everyone in the community more.

    There must be a better way which encourages businesses to develop and supply products of value to society and governments to fund only those activities/projects which can not be done by individuals or businesses. I suggest higher taxes for financial transaction profits and lower taxes for other service providers and product manufacture and distribution businesses.

    Once we all get past the idea that we can make money from nothing we will all be better off.

    The other trouble we have in communicating the size of the problem is people do not understand billion and trillion in the same way they do 500 or 1000. There is no internal feel to these really large numbers and it is difficult to engage in conversation with them as part of it.

  43. EB

    Yeah, I dunno. Westpac’s loan book is half interest only loans. They’re also counting the RBA’s CLF on their balance sheet, so let’s not kid ourselves about their position, nor who will be stepping in when this housing market shits itself.

  44. Chris M

    I see it as the re-introduction of the FID and BAD taxes from 20 years ago. A very regressive government.

  45. Tel

    Sure they exist. Corporations are real. They exist because the government forced large partnerships to incorporate in the late 19th century.

    Corporations are real, but that doesn’t mean they are people.

    Algorithms are also real, but you wouldn’t want your daughter to marry one.

  46. .

    I dunno, maybe it would be great.

    After all, many young women decided to marry the government – the fruit of feminism and socialism.

  47. Tel

    So you believe that it’s possible for a “bank” to bear the cost of the bank levy without individuals losing out, a la ScoMo’s assertion that the banks should “absorb” it? If a bank is “real” presumably that can occur?

    I think you might be confused: real doesn’t imply an ability to pay tax. The moon is real, but it will never pay tax. The white lines down the middle of the road are real, and they serve the very real purpose of helping avoid collisions between oncoming vehicles but they are still not in a position to pay tax.

    The Constitution of Australia is a real thing, it has real meaning, but you cannot make it pay tax.

    My cat is a real cat, she kills real mice, but she pays no tax.

    You see what I’m getting at here ?

  48. Squirrel

    Seventy years on, the “party of Menzies” (sic) is effectively doing what Chifley couldn’t.

  49. Mark A

    Tel
    #2378884, posted on May 12, 2017 at 8:26 pm

    The Constitution of Australia is a real thing, it has real meaning, but you cannot make it pay tax.

    My cat is a real cat, she kills real mice, but she pays no tax.

    You see what I’m getting at here ?

    Have to admit, I don’t see what you are getting at.
    Maybe I’m just too dull or stupid?

    Why can’t a bank as a business pay tax?
    Unless you are referring to some esoteric economic term, I have no idea what you are talking about.

  50. Pingback: What’s In A Name – A Letter to the Treasurer | Catallaxy Files | Cranky Old Crow

  51. Crossie

    “Dear Marxist Sleeper Agent and Traitor to Liberal Values” would be more appropriate.

    How the mighty have fallen? I used to think that Morrison was a good prospect for a future Prime Minister but now I wouldn’t vote for him to be a street sweeper.

  52. Crossie

    Further, there is no repairing the budget or the actual economy unless the RET is abandoned. There’s a lot of ground to make up to get us back to the relative position were before the CO2 caper started. I can’t see any other viable work-around.

    This is a double whammy, we pay extra for energy that our resources guarantee should be cheap and plentiful. With increases in energy costs high-energy using businesses go overseas leading to unemployment and loss of tax revenue.

    This is not rocket science but our better keep ignoring the real cost of renewables.

  53. alexnoaholdmate

    When people on the street – according to Fairfax and the ABC, at least – keep whinging about how the banks and big business don’t pay “their fair share” –

    – I wonder: who do “the people” think actually pays corporate tax?

    Oh, it’s Apple and Google and the Commonwealth Bank, we’re told. They make the huge profits, they can afford to pay more.

    Well, yes. But “Apple” and “Google” and “the bank” are just names on a page. There is no Mr NAB who takes this money down to the store and uses it to buy his smokes. Who do those profits really go to?

    Either into investment, or into your pocket. Less tax and higher profits means more for dividends.

    “Oh, but I don’t own any shares. That sounds like a rich person making excuses to me…”

    Got super? Who do you think your super fund invests in?

    And for this reason – because the average Australian, whether they know it or not, has their money invested in the banks and “big business” as we speak – those corporations will be very careful about having their profit diminished. If it does, they’ll catch hell.

    So, a new levy is imposed on the banks. The banks aren’t going to let it diminish their profits. Who do you think will end up paying it in the end?

    You, you supercilious ABC-watching twat.

  54. cynical1

    “Born to Run”.

    Written in ’75, it took us on a ride.

    Cars, girls, adventure, on the road.

    Let’s bust out.

    In 2014, the song’s writer cancelled a concert.

    Why?

    Because a state (North Carolina) refused to sanction trans men using female’s toilet rooms, therefore the
    tour date in that state was cancelled.

    It’s all you need to know about how far down the sewer we are.

Comments are closed.