Lessons from Italy as Greens spruik bank tax
The latest calls for a super profits tax on banks are unlikely to gain traction in Parliament. But dismiss the idea at your peril.
CBA’s record $10.2 billion profit has sparked a predictable response. Almost right on cue after the numbers dropped, the Federal Greens called on the Government to impose a windfall tax on the big banks, with the proceeds used to help fund affordable housing and health care.
It’s an out there idea, one that is unlikely to ever gain traction in Parliament. Depending upon how the funds raised would actually be spent, it could also work directly against the RBA’s desire to cool down the economy.
But in a sign of how acute the pain in the community over interest rates is at the moment, the idea has received a bigger than usual reception. The Greens’ calls were published across the major newspapers and attracted a predictably scathing response from the business sector (which might have been the point of it).
Yet, wacky as the idea might seem to Australians, it shouldn't be immediately dismissed - for at least two reasons. Firstly, we are only a couple of years removed from a royal commission into Australia’s banking sector and anger about the big banks seems to be ever present in this country. Secondly, another major developed economy, Italy, this week announced a very similar proposal to the Greens. Italy’s right wing government (which is at the opposite end of the political spectrum to the Greens) shocked markets with a proposal for for a one-off 40% windfall tax that would be imposed on its big banks in 2023.
