Unity best bet to avoid Turnbull's bank tax
In Malcolm Turnbull's May Budget there was one big surprise - a $6 billion new tax on the biggest banks.
The move comes in response to mounting community pressure on the government to crack down on the banks on a range of fronts. In recent years scandals, ballooning profits and customer frustration has led to calls for a Royal Commission into the practices of Australia's banking sector.
While Turnbull's new tax is designed to look like a swipe at the unpopular banks in an effort to woo sceptical voters and stave off Royal Commission calls, it's ordinary people who may end up footing the bill.
Mark Genovese, Chief Executive of Unity Bank, which is not affected by the new tax, said it's the big banks' deference to corporate shareholders that will ultimately lead to them passing on the $6 billion cost to customers through higher interest and fee charges.
Mark said there are no laws on what a bank can and can’t charge on most things they do, "this is why competition is important and that people vote with their feet."
"The big banks have already signalled they'll flick this new tax on deposits onto customers in order to maintain record profits for shareholders. Unity and other member owned banking institutions aren't affected and we won't be passing on any new costs. We put people first."
Mark has little sympathy for his competition, saying the dominant players in the sector have got away with too much for too long.
"The major banks have essentially empowered the government to introduce this tax as a result of their poor corporate behaviour over many years which has resulted in a call for a Royal Commission - and rightly so."
BANK TAX QUICKFACTS:
Q: What's being taxed?
A: All deposits with the big four banks (plus Macquarie) over $250k in their accounts – the banks pay it directly to the government
Q: What will happen?
A: The big banks have said they'll pass on the cost of the tax to customers in interest, fees and charges
Q: How can I avoid paying more for banking services and my mortgage?
A: Switch to a smaller bank that isn't affected, like Unity Bank