The West Australian government says it could raise about $1 billion over four years from a state-based bank tax but suggested it would be unlikely to pursue the idea if it failed in South Australia.
Treasurer Ben Wyatt said a bank tax was an attractive option for the Western Australia because the revenue raised would not be redistributed to other states, unlike revenue from mineral royalties.
But Mr Wyatt played down suggestions the new Labor government could announce a bank tax in its September budget, telling ABC Perth radio he had not yet asked Treasury to analyse the idea in detail.
The South Australian government wants to impose a levy of 0.015 basis points on the liabilities of the big four banks and Macquarie to reap $370 million over the next four years, but the plan looks likely to be blocked in parliament by the Liberal opposition.
Mr Wyatt said a similarly-structured West Australian tax would raise about $1 billion over the forward estimates but he would have “some concerns” about pursuing it if it first failed in South Australia.
“It is very much a watching brief at this point and we are moving very much to the end of the budget preparation period,” he said.
“But something like that which may have an impact on business investment – and business investment has declined significantly in WA so that is my prime concern – may mean I need some better analysis on that.”
Australian Bankers’ Association chief Anna Bligh said Wednesday a tax on banks would impact the West Australian economy and banking representatives would be in the state this week and next to lobby against the idea.
WA is forecasting four consecutive deficits, as large as $3 billion this year, and state debt of $42 billion by 2020. Interest on that is expected to be $1.179 billion a year.