Case for excess profit tax on banks clearer than ever

The Government should adopt an excess profits tax and use any revenue raised to help people make ends meet, following the rise in the Official Cash Rate today.

“When interest rates go up, it is possible the super-profitable Aussie banks will further increase their profit margins. An excess profit tax is a simple and fair way to help families struggling to make ends meet,” says Green Party finance spokesperson Julie Anne Genter.

“Families on low incomes, who already spend most of their pay-cheques covering the essentials, are impacted by high inflation the most.

“Banks, on the other hand, are practically immune from the impact of inflation.

“When interest rates go up, banks are able to extract more money from families who are just trying to get by and cover their mortgage or rent.

“A loosening of monetary policy during the pandemic has been immediately followed by interest rate hikes. This has created a boon for the banks.

“Not only have they profited from all the extra mortgage lending they were encouraged to do over the last couple of years, now they are profiting from higher interest rates.

“Perhaps worse of all, banks themselves have done nothing special to generate this extra profit. It’s not the result of some smart strategic move. They are simply benefiting - or more accurately their executives and shareholders are benefiting - from a change in economic circumstances.

“Tens of thousands of people will be looking towards the prospect of higher mortgage payments and rightly wonder how it is that, as they struggle to make ends meet, banks can rake in eye-watering profits.

“We cannot simply stand on the side-lines and ask the banks to play nice.

“The solution is simple: introduce an excess profits tax to ensure banks - and other large corporations profiteering from high inflation - are taxed fairly and the money used to support people to make ends meet,” says Julie Anne Genter.

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