Westpac says bank levy will cost it $260m

Westpac says the bank levy introduced in the Federal Government will increase costs by $65 million after tax in the the

Westpac says bank levy will cost it $260m

"ASX Release 22 May 2017 IMPACT OF NEW MAJOR BANK TAX ON WESTPAC Westpac today updated the market on the new major bank budget deficit fix levy ('Levy") announced in the 2017 Federal Budget. Last week, Assistant Treasurer Michael Sukkar did not rule out including foreign banks and Queensland MP Andrew Laming says they should be taxed as well. "We therefore intend to hold an interactive telephone "town hall" discussion for shareholders in the lead-up to our annual general meeting in November", Ms Livingstone wrote in a note to the bank's 800,000 shareholders.

Australia's four biggest lenders on Monday launched a strongly worded attack on the government's new levy on big banks, estimating almost A$1 billion (US$745.00 million) in additional annual costs between them.

That assumption that the government would step in to help the banks appeared to support the Coalition's argument that the big banks had significant market power and could afford to absorb its $6.2bn levy.

"Foreign banks were first encouraged into the Australian market, for very good reasons, by Paul Keating in order to ensure that we had increased competition in the banking system". You know, I know and the government knows that a tax can not be "absorbed".

In the letter Mr Maxsted reiterated the banking industry's criticism of the levy, and included estimates of how the profit could potentially affect dividends if banks are unable to offset the cost in other ways.

Commonwealth Bank said it estimates the levy will amount to A$315 million a year, or A$220 million after tax.

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In a sign of the banks' campaigns against the tax increasing, both banks also wrote to their hundreds of thousands of shareholders protesting against the levy, with CBA taking the unusual step of holding "town hall" meetings with shareholders over the tax.

"The actual cost of the tax will depend on the final legislation and our liabilities at the time the tax is determined", he noted.

Worldwide rivals would not be subject to the levy, although HSBC is subject to the equivalent United Kingdom scheme.

And that means the tax will strip 8 cents a share, or about 4.3% of dividends, based on Westpac's 2016 full year dividends of 188 cents.

"We call on Bill Shorten to reflect on the national interest and the public interest instead of continuing his opportunistic political games", he said.

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