Bill Shorten (Maribyrnong, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. The government has confirmed today that the big banks can claim an unspecified tax deduction for the bank tax. Can the Prime Minister advise whether bank customers will be able to claim a tax deduction if the banks pass the cost of the bank tax on to customers?

Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

Bank customers certainly would not be able to claim a tax deduction for interest if the Labor Party got in and abolished negative gearing. They certainly would not be able to do that. I should correct myself: wealthy borrowers, who could offset their interest cost against their investment income, would be able to, but doctors, nurses, policemen, teachers and other people would not be able to offset it against their employment income. So the Labor Party has a hide to talk about deductibility of interest. On this side of the House interest is deductible if it is incurred to acquire an income-producing asset, in accordance with the provisions of the income tax act since 1911, I believe. As far as the deductibility of the bank levy is concerned, the bank levy is a business expense, and they will be able to treat it like any other expense. I would invite the Treasurer to say a little more about this matter.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

Thank you, Prime Minister. I refer the Shadow Treasurer to his comments when he had his bank tax which was going to raise $2 billion—actually $1.5 billion at the time. They seem a little concerned about the tax we are putting in, which will raise more than three times that to support schools and hospitals and all of this important expenditure. When he was asked a question about it being passed on, when it was less than what it is today, he said: 'Well, it's a matter for them. In an open market economy they have to make a decision. It could be that the banks decide to absorb that much of the cost or make themselves more attractive to customers.'

When they are in opposition they are happy to go around and make these comments about these topics, but when they were in government not only did they not put extra funding into the ACCC, which will be tasked with monitoring everything that the banks do in relation to this matter—there were no extra powers, there was no extra money, there was nothing for the ACCC when the Shadow Treasurer, then Treasurer, put a tax on pensioners' bank accounts and deposits of $5,000 or $100. That is who the Labor Party wanted to tax when it came to the banks. They did not want to tax the banks; they wanted to tax depositors. It was called a bank deposit tax. It raised less than a third of the revenue that this government is raising by properly taxing the banks to ensure that the privileged position that they hold in our financial system—

Ms Husar interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Lindsay will leave under 94(a).

The member for Lindsay then left the chamber.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

which today have had their credit rating restored—we have acted to ensure that we have the right measure in place. They wanted to raid pensioners' bank accounts.