ABA WELCOMES BUDGET SURPLUS MAINTENANCE AND FINANCIAL SERVICE INITIATIVES Sydney, 23 May 2001: The Australian Bankers' Association (ABA) welcomes the Government's commitment to maintaining budget surpluses in the years ahead. The ABA also commends the 2001-02 Budget for the introduction and implementation of important initiatives aimed at improving the financial services industry and Australian business in general. ABA CEO, David Bell, today said: "There are a number of welcome initiatives in last nights Budget and we are pleased to see the introduction of a range of benefits to financial institutions and banking customers generally throughout Australia. "The ABA is particularly pleased with amendments to the Exposure Draft Legislation on Thin Capitalization and Debt / Equity Borderline. These amendments represent important measures that will ensure Australian bank customers and shareholders are not disadvantaged as a result of proposed major changes to required capital levels. "The banking industry has had constructive consultation with the Federal Government on this issue, and the announced changes mean the Government can meet its domestic policy objectives, while maintaining the ability of banks to compete offshore", Mr Bell said. In summary the key Budget initiatives commended by the ABA include: Maintenance of the budget surplus; Greater certainty for financial institutions due to changes to the Exposure Draft Legislation on Thin Capitalization and Debt/ Equity Borderline; Commitment to the maintenance and growth of the Regional Transaction Centres (RTC's). This is most important for rural and remote communities due to the extension eligibility to include Australia Post agencies and JiroPost services, which will enable access to 64 financial institutions; Confirmation of the abolition of the Financial Institutions Duty (FID) which will relieve bank customers of $1.2 billion in transaction charges annually; Confirmation of the reduction in the company tax rate from 34% to 30%. This is a particularly important initiative if Australian business is to be internationally competitive. Mr Bell said, "In summary these key initiatives should provide a measure of encouragement and support for all Australian banking customers and those in business." Mr Bell has also called on both major parties to ensure they maintain a commitment to on-going budget surpluses. For further information contact: Heather Wellard ABA PR Phone: 02 8298 0411 Mobile: 0409 830 439     ENDS