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Jay vows to fight for bank tax as Commonwealth posts $9.9 billion profit

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Parliament is unlikely to resolve its standoff over the Weatherill Government’s contentious bank tax any time soon, despite debate to continue today with the Premier launching a broadside at “money launderers to organised crime and terrorist groups”.

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The budget measures bill is this week set to pass in the House of Assembly, where the Government controls the numbers, but is unlikely to progress to the Upper House before week’s end – when the parliament rises for its winter recess.

It won’t sit again until late September, which means the bank tax will continue to be a talking point for at least two more months.

The rhetoric ramped up today, with debate to resume in the lower house, as the Premier held firm despite a concerted campaign by the major banks against the measure, which would see the state skim $370 million from their bottom line over four years.

“We’re going to pursue this vigorously,” Jay Weatherill told reporters today.

“We’re going to pursue this and pursue it strongly.”

He took aim at the Commonwealth Bank, which today exceeded analysts’ expectations with a full-year cash profit of $9.88 billion, albeit amid a scandal after allegations that the bank had breached Australia’s anti-money laundering and counter-terrorism laws.

“Are we seriously going to be lectured by the banks, the money-launderers to organised crime and terrorist groups?” Weatherill said.

“Are we seriously going to be getting lectures from them?”

He noted Commonwealth’s result, a 4.6 per cent improvement on 2016 representing an eighth straight record for Australia’s largest bank, noting: “Well, we’re going to take $20 million of that!”

“Are people seriously crying a river of tears for the banks, when they use their market power to basically pass on every single dollar that they can?

“The only reason they’re screaming about this tax [is] they know they can’t pass it on… they have to take it straight off their profits.”

He refused to countenance the Government’s next move if, as expected, the bill hit an Upper House roadblock, saying: “We haven’t got there yet.”

“It’s a very serious matter for an upper house to block a budget bill, which contains other concessions that benefit SA businesses and consumers,” he said.

“We’re going to ask every member of the Legislative Council to consider this carefully.”

He also threw a veiled warning at the Liberals, noting “they’re hopeful of forming a government… what sort of government do they expect to run if the new convention is that budget measure bills can be opposed and blocked by the Legislative Council?”

“It’s a very serious departure from the current practice,” he said.

But Opposition Leader Steven Marshall insists the Premier should “cut his losses” and kill off the proposed bank tax – as early as today.

“South Australians know Jay Weatherill’s state bank tax will drive investment and jobs interstate and are overwhelmingly opposed to this destructive tax,” Marshall said in a statement.

“Consumer and business confidence in SA is already incredibly fragile as a result of high unemployment, sky high electricity bills and Labor’s Emergency Services Levy tax grab.

“Jay Weatherill needs to listen to South Australians and remove his toxic state bank tax from the Budget Measures Bill today.”

Meanwhile, a controversy-hit Commonwealth Bank was revelling in its financial performance, with chief executive Ian Narev saying its “performance this year has again contributed to the financial wellbeing of our customers, shareholders, our people and the Australian economy”.

“This is the result of our consistent focus on customer satisfaction, innovation and financial strength,” he said.

Mortgage repricing in response to regulatory intervention in the home loan market contributed to a second-half cash profit of $4.97 billion.

But higher funding costs and competition for mortgage customers more than offset those gains, pushing net interest margin down 0.03 percentage points to 2.11 per cent.

Analysts had expected a 12-month cash profit of about $9.8 billion.

Statutory net profit for the 12 months to June 30 rose 7.6 per cent to $9.93 billion.

CBA declared a fully franked final dividend of $2.30 per share, up nine cents on last year, taking its 12-month payout to $4.29.

The bank has introduced a discounted dividend reinvestment program, which should help it build capital reserves to meet the Australian Prudential Regulatory Authority’s recently defined “unquestionably strong” standards.

It also confirmed it is in talks with potential buyers of its Australia and New Zealand life insurance businesses, although it said it may still end up retaining them.

Regulator AUSTRAC – the Australian Transaction Reports and Analysis Centre – has accused the bank of failing to provide the necessary on-time reports for more than 53,500 transactions of $10,000 or more through its Intelligent Deposit Machines between November 2012 and September 2015.

The bank says the problem was a coding error, that was fixed within a month of it being discovered.

CBA’S RECORD RUN

CASH profit up 5pct to $9.881b

NET profit up 8pct to $9.928b

TOTAL revenue up 5pct to $26.005b

FINAL dividend up 8.0 cents to $2.30 per share, fully franked

– with AAP

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