ABA clarifies position on the proposal to extend GST to financial services in the AFR (not published)

11 November 2015

Sir,

Following the Australian Financial Review’s decision not to publish a correction to the 10th November 2015 story titled 'Banks could be taxed like wagering companies' as requested by the Australian Bankers’ Association (ABA), the ABA would like to clarify comments attributed to the organisation.

ABA Chief Economist and Executive Director, Industry Policy Tony Pearson was interviewed by an AFR journalist on 9th November on the proposal by Premier of South Australia Jay Weatherill to extend the goods and services tax (GST) to financial services.

The story in the AFR included two sentences which are not reflective of the ABA’s position as articulated in the interview:

Banks pay $1 billion a year in GST-related taxes and any additional cost would have to be passed on to customers in the form of more expensive loans, the Australian Bankers' Association argued.

Bankers' association chief economist Tony Pearson said financial services firms would pass on the extra costs to customers.

Recordings of the interview confirm that Mr Pearson did not say anything about financial services firms passing on the GST to customers.

Yours sincerely,

Steven Münchenberg

Chief Executive Officer

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