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Jay's investment guru wasn't consulted on bank tax

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UPDATED | The Weatherill Government’s Investment Attraction supremo – and former bank executive – Rob Chapman says it would be “naive” to think the controversial bank tax won’t “have an impact”, as the Premier today confirmed he did not seek the agency’s advice before introducing the measure.

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Jay Weatherill told media he did not consult Investment Attraction SA or the Economic Development Board – the forum explicitly established to advise the Government on economic matters – before introducing last week’s budget measure, which will levy the major banks on six basis points of applicable liabilities per year, adjusted to reflect SA’s six per cent share of GDP.

However, the Premier maintained the tax was “appropriate” – and urged other states and territories to follow South Australia’s lead.

“What we’ve done is calibrated this in a way that if other states and territories were to join [it would] create what we think is the equivalent to the amount of under-taxation of banks in this country,” he said.

Ironically, the Premier and his Investment Minister Martin Hamilton-Smith were today announcing a finance industry success story for SA, with self-managed super funds provider SuperConcepts planning to expand its Adelaide operation – creating 52 jobs – with $1.6 million of support from the state’s Economic Investment Fund.

Jay Weatherill addressing media today. Photo: David Mariuz / AAP

But the occasion swiftly turned awkward when the Premier hit back at “hysterical” critiques from the major banks – most notably Westpac.

He said the bank’s claim that it was interested in creating jobs was “laughable”, arguing it had instead shed 387 jobs in the past four years through the closure of 21 SA branches.

He went on to list each one, with Chapman – the former managing director and chair of Westpac-owned Bank SA – looking on.

Chapman was asked if any businesses had told him they would not invest in SA as a result of the tax, replying: “Not to date (they) haven’t, no.”

“But it’s going to have impacts – you’re naïve to say it’s not going to have impacts,” he conceded.

“But I’m not going to get into looking at every budget measure, every piece of legislation that goes before parliament – that’s not my job… my job is to attract businesses to this state, and to date we haven’t had any trouble doing that, and I don’t anticipate having any trouble in future.”

He recently left another job, as deputy chair of the EDB, and noted: “If I was on the EDB and we were consulted about this, I’d have an opinion – but I’m not.”

However, Chapman refused to comment on specific budget measures, saying: “There’s an abundance of them: some are good, some are bad, some are right, some are wrong.”

“I’ll deal with what I’ve got.

“There’s going to be impacts from every budget measure… there are things that are going to make my job harder every single day; I’ll deal with it, and I can balance it up with a number of good things that go on that we should report more of.”

Nor did Chapman buy into the Government’s ongoing stoush with Bank SA, which has to date shelved a backroom office expansion and pulled sponsorship for a Labor fundraiser in response to the bank tax.

“The management today, compared to when I was there three or four years ago… the world’s a different place,” he said.

“I’m not going to comment on management today, suffice to say they’ve got a difficult job and I think they do it well.”

He said he had spoken to “a couple” of executives from major banks, whom he declined to name, but explained: “Of course they’ll seek my counsel on [the tax] and ring up and look for some context around it.”

Weatherill himself sought to explain that context, saying the bank tax was the result of his lost battle on broadening the national GST base by including financial services.

“This is in the interest of SA… we’re using this money to create South Australian jobs,” he said.

Weatherill met yesterday with executives from ANZ, a meeting he described as “a professional discussion” in which “we were very clear about our position”.

Opposition Leader Steven Marshall said he would “like to know from the Premier who he’s getting his economic advice from”.

“It’s quite clear he’s not speaking to his major economic and financial advisors,” he said.

Marshall also met with ANZ yesterday, which has prompted Labor to claim the Liberal leader is retreating from his pledge not to block the Budget Appropriation Bill, although he has previously left open the prospect of amending the specific budget measure.

He said today he was “consulting widely with people throughout SA [and] the overwhelming sentiment is people are very concerned about what the impacts of this massive new bank tax is going to be on their hip pocket”.

“It would be extraordinary for us top block this measure – but these are extraordinary times,” he said.

“I think there is now increasing information that this tax may not be in the best interest of all South Australians… our primary responsibility is to the people of this state.”

He said the Liberal Party would “make a decision at our party room meeting on Monday”.

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