South Australian Bank Tax

The people behind our business

Hear from these proud South Australians on what a state-based tax on bank earnings would mean for our customers, people and the community.

Andrew Hagger

NAB Chief Customer Officer

I am a passionate and proud South Australian. Born and bred in Adelaide, my parents still live in the house I grew up in in the Adelaide Hills. I care deeply about the South Australian economy, and as Chief Customer Officer at NAB, I bring the voice of South Australia to everything we do.

South Australia’s economy is in transition. Some major industries are exiting, others are on hold, and new growth sectors – tourism, defence, and education – will take time. Time and investment.

There are real opportunities for South Australia. But for those opportunities to be realised, banks like NAB have an important role to play. To fuel the economy, and to help create jobs.

NAB has more than 240,000 South Australian customers, we support 55,000 local businesses, and we use local business suppliers. But this is more than the numbers alone. It is people. It is what we do in the community, and the investment and funding and support we provide to help South Australian families buy their homes, and entrepreneurs to build their businesses.

When the State Government announced a Bank Tax, as a local I was disheartened. As a bank, we were deeply concerned. A tax has to be borne by somebody, and, if passed, it would have to be borne by our customers, our shareholders, our employees, our suppliers, or any combination of these.

Every day, businesses, including NAB, consider where to invest. We create and support local jobs. Last year, for example, we chose South Australia as the state to pilot our new personal banking origination platform. It was the biggest ever overhaul of our technology systems – a massive direct investment in the South Australian economy through job creation, office facilities and training, accommodation, and hospitality. In the future, would we consider other states instead of South Australia for such projects? Yes, potentially. Because it may now be more financially viable to look elsewhere.

NAB is proud of the service we provide to our customers, the contributions we make to our communities, and the role we play in the economy. We are a fundamental part of South Australia, and that’s why we are standing up against this tax.

THE CHIEF CUSTOMER OFFICER

Chris Rousvanis

Branch Manager

A few weeks ago I was involved in a local Auskick clinic where we put on a sausage sizzle and donated a prize for a raffle, all through my employer, NAB. The event was a lot of fun and a great way to spur on a community of enthusiastic would-be footballers, and the mums and dads who encourage them. For NAB, supporting the local area where I work as a branch manager was enough justification for our involvement. It added to a great atmosphere on the day, and helped us to build stronger relationships in the area.

I fear small investments like this would become a thing of the past under the state government’s proposed bank tax. It would mean a stop to some of the many activities we do within the community. As a bank we are obliged to show profits to our shareholders, we cannot just wear the extra tax as a loss. The sad reality is that the only way this can happen is if the bank invests less in its people (like me) and resources (like our branch), passes the cost on to customers, or gives out less to shareholders. As a branch manager, it’s disappointing to consider the impact this would have on the pipeline of upgrades and refurbishments that some of our branches need.

The banking industry is huge in South Australia, employing a vast number of people. How is it fair to single out businesses that are doing well and charge them more tax than businesses in the same industry that aren’t? For people in my field of work, these are the biggest employers, and I don’t see why the bank would spend more money in creating jobs here. I struggle to see how that is in the interests of South Australians.

As an employee, shareholder and customer, I have serious concerns.

THE BRANCH MANAGER

Carol Mardon

NAB’s longest serving SA banker

In my 46 years at NAB I’ve seen a lot of change. I grew up without computers and I started at the bank’s Salisbury branch when you could still smoke at your desk. I’ve been at the Modbury branch for close to three decades, and have built up a strong relationship with so many of our customers in that time. My customers today are my customers’ children!

Many of our customers have raised the issue of the bank tax when they’re in the branch. They’re curious and they definitely have opinions. The fact that banks would have to pass the tax on is a definite concern and some customers have questioned why they should continue doing business with us, rather than a small bank.

When I first heard about the plans for the tax I thought, ‘why are you picking on us?’ Just because we’re a bank are we expected to wear it? The thing is, we’re not just ‘a bank’. There is so much more we do for our customers and the community. For example, I had a Serbian customer come in recently with a letter from Medicare informing him of changes to his account. Due to language barriers, he couldn’t understand what the letter was about and so was quite distressed. I spent time with him talking through what it meant and how everything was going to be fine, that he would still see money in his account. I guess that’s a community service that people take for granted. There’s a great pressure on us to deliver an excellent level of service. I think customers realise that working for a bank isn’t just about filling in bits of paper; we’re highly trained and we’re experts in our field. I work three days a week but I’ve never been busier.

THE LONG-TIME BANKER

Ross Whitman

Business Banking Executive

I think the biggest impact of a proposed tax would be felt in the overall confidence of the state. South Australian businesses are already struggling with the highest energy costs in the country. What investment opportunities might this mean we miss? We’re reliant on investment from interstate and overseas, and any change to this would have a trickledown effect right across South Australian businesses. This is a genuine fear expressed by many of my customers. They’re not so worried about how they might be impacted if the cost of the tax was passed on. Their concern is with the state’s overall economy, and its ability to foster the right conditions for growth and prosperity.

People in business want to bank with a major bank for a reason. We offer scale, a national support network and highly experienced bankers. So when the state government makes suggestions that our customers should take their business to a smaller bank or credit union, it’s concerning.

You have to think about how we might operate differently as a business. Would our own allocation of resources and investment differ in South Australia to the rest of the country? The impacts would be felt right throughout the external business community.

I’ve been with NAB for almost 30 years. NAB is a major employer, along with the five impacted banks. We are already one of the country’s biggest tax payers. I was surprised that any state government would want to be seen as going alone in terms of tax policy, isolating five companies in one particular industry. I didn’t understand the logic.

THE BUSINESS BANKER

Louis Langanis

Goodwood Bakehouse / NAB Business Bank customer

I’ve been in small business for around 40 years and I can tell you it’s just getting harder and harder. There are so many more extra costs now than there used to be, and our margins are getting tighter and tighter. We started our business, Goodwood Bakehouse, from scratch around 20 years ago and have been with a major bank the entire time. They’re reliable and accessible. That’s what worries me about this proposed tax. Someone’s got to pay for it. The banks have to get the money from somewhere. I’m going to pay for it. Shareholders are going to pay.

In business, there will come a point where people just say ‘it’s not worth it anymore’, and they walk away. You work long hours, a lot more than a normal job, just to get ahead. But if all the extra effort isn’t reaping a benefit, what’s the point? Electricity prices are killing us. Five years ago we used to allow around $150 a week for energy costs. Now it’s around $100 a day. We’re hamstrung in that we can’t really put our prices up that much, so any extra cost to our business would have to come out of our pockets. I really think small business is shrinking in South Australia, and the state government isn’t doing us any favours with their policy decisions. To charge the bank like this is essentially throwing sand in our face. How can they justify a tax on top of another tax? It’s double dipping. It’s got to get to a point where you can’t tax anymore.

THE CUSTOMER

Stephen Stegmeyer

Senior Agribusiness Manager

South Australia has had a lot of difficulty with transformation; of the health system, power supply, the desalination plant. Everyone’s water bills are so much higher than they once were. We’re an overtaxed state and there’s no real vision on how to increase revenue. That’s why when I heard about plans for a state-based bank tax I thought it was a cheap shot.

It’s been said that the banks don’t pay enough tax and I think that’s a poor excuse. The major banks combined pay more than any other ASX listed companies. Just because we’re larger, and therefore make larger amounts of money, we’re an easy target. I mean, banks as a whole aren’t liked that much already. But most of my customers understand it, they understand how banks operate, and they expect that the cost will be passed on to them.

Working in agribusiness, one of the things that stands out to me is how metro-focused the state government has been historically with its investment in major infrastructure projects, like roadwork and hospitals. The moment you have a centralist view, communities suffer. Most of our staff live and work regionally. They’re deeply involved in the community through representation in sporting clubs or the Country Fire Service. Locally, the bank sponsors a lot of sporting clubs and agricultural shows too. But it can be hard at the best of times to attract new people to these locations. Most often they’re relocating with their family. Their partners are also looking for jobs, they’re looking for quality schooling for their family, and these options can be tough to find. Over the course of time, with an extra cost passed on to us, I guess we would have to look at the spread of our resources and whether it makes sense.

THE AGRIBUSINESS BANKER

“Figures are correct for FY16. NAB’s Full Year Results were announced on 27 October, 2016. For more information visit the NAB Shareholder Centre https://www.nab.com.au/about-us/shareholder-centre/asx-announcement

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