Banks say they'll pass 2017 budget levy on to customers

The war between the banks and the government has well and truly started, with the banks fighting back against the $6 billion levy announced in Tuesday's budget. And Simon Birmingham has made a promise to Catholic schools. It's the news you need to know, by Emily Watkins and Max Chalmers.

BANKS, GOVERNMENT SQUARE OFF

The war between the banks and the government has well and truly started, following the $6 billion levy on the big bank in Tuesday’s federal budget. Banks have warned that the tax will be passed on to customers and shareholders, with ANZ chief executive Mike Smith telling The Australian the plan was “reminiscent of less well managed countries in Africa and South America”. Westpac boss Brian Hartzer has called the levy a “stealth tax”, also in the Oz.

Prime Minister Malcolm Turnbull told The Daily Telegraph‘s Sharri Markson that customers should be ready to walk away from the banks if they jacked up rates to cover the tax, echoing Treasurer Scott Morrison‘s call yesterday for the banks to “pony up” and pay. Morrison made the comments in an address at the National Press Club, which is sponsored by Westpac — the bank removed its logos for the speech, the Australian Financial Review reports.

And former prime minister John Howard said he was “uneasy” about the levy at an event in Melbourne yesterday, saying the same arguments that were made about Labor’s mining tax could be made about a tax on the banks.

FUNDING GUARANTEE FOR CATHOLIC SCHOOLS

Education Minister Simon Birmingham has offered Catholic schools a funding guarantee to calm opposition to the government’s Gonski funding plan, the Australian Financial Review reports. The move follows concerns over the indexation rate, which the schools were worried could fall below the level of cost increases. The government is expected to introduce the education funding legislation to Parliament today.

EASY COMEY, EASY GO

US President Donald Trump has fired FBI head James Comey just three years into his 10-year term. Comey had been overseeing the FBI’s investigation into allegations of collusion between Trump campaign officials and Russian intelligence agencies. The New York Times is reporting Comey requested extra resources for the investigation a short time before his sudden sacking.

Comey has been a high-profile figure since the 2016 election and infuriated both sides of politics. During the run-up to the election he broke with convention and publicly chastised Hillary Clinton despite declining to bring charges against her. Just days before the election he wrote to Congress announcing the investigation had been reopened. The probe led nowhere, but Clinton has cited it as a reason for her defeat.

But in recent months Comey’s agency has turned its focus to Trump and his associates. The president and his spokespeople cited bipartisan displeasure with Comey and, bizarrely, linked his sacking to Comey’s public criticisms of Hillary Clinton. They have argued he decision was led by the Justice Department, not the president. The day after the shock announcement, Trump met with Russian Foreign Minister Sergei Lavrov.

CHARGES LAID AFTER RACING INQUIRY

Australian Turf Club staff have been charged after a Racing NSW cruelty inquiry, The Sydney Morning Herald reports. Michelle Steele and Dennis Mitchell have been charged with breaching the Australian Racing Rules over an alleged deliberate program of sedating the retired thoroughbreds of the Australian Turf Club’s mounted security division so they would behave. Racing NSW has said the pair will face a hearing.

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WHAT’S ON TODAY

Canberra: Opposition leader Bill Shorten will give his budget reply speech in the House of Representatives.

Sydney: NBN third quarter results will be announced.

Sydney: A protest outside NSW parliament to urge politicians to support a bill to be introduced today decriminalising abortion.

THE COMMENTARIAT

Budget 2017: few axes and lots of taxes — politics reigns supreme — Niki Savva (The Australian $): “Most Coalition MPs reckon they have had a good three weeks. They accept this is the budget they had to have, not necessarily the one they wanted. They think they can sell it, and they want to get on with it.”

We suffer as the nation turns Left — Andrew Bolt (Herald Sun $): “The Turnbull Government’s Budget was a white flag. Labor has won and we’re all Leftists now.”

Near impossible to tell if banks pass on the budget levy — Karen Maley (Australian Financial Review $): “While regulators generally welcome the increased clout and responsibility they’ve been given, there are some concerns that it will be extremely difficult to identify whether banks pass on some or all of the cost of the levy, because the size of the levy is so small in terms with the five big banks’ overall liabilities of $3.3 trillion.”

Federal budget 2017: They’re governing, but ducking hard decisions — Peter Martin (The Age): “A government seriously committed to governing would be less reckless with our money. It would fund the services we want but say no to wealthy pensioners who escape the assets test by stashing millions into their family homes. It would charge for congestion before building new roads.”

It’s not as bad as the last one but this budget is still dismantling my generation’s future — Alex McKinnon (Guardian Australia): “Perhaps the scariest thing about the 2017 budget is what’s missing. For the third year running, Australia has no climate policy worth the name.”

THE WORLD

The world’s third largest carbon emitter, India, is on track to make or beat its renewable energy targets set during the Paris climate accords. The improvements are being driven by record low solar energy prices and a strong government commitment to investment. — The Guardian

NATO is considering sending thousands more troops to Afghanistan. Since withdrawing from combat duties in the country in 2014, the Taliban has surged, regularly striking government and civilian targets. But NATO secretary general Jens Stoltenberg said any increased presence would not mean a return to combat duties. — Al Jazeera

Israel’s public broadcast television channel has been rapidly closed, with presenters becoming emotional on air as they learnt of the news. Critics have alleged the channel was shut for being too critical of right-wing figures, but allies of Prime Minister Benjamin Netanyahu deny the claim. It will be replaced by a new, smaller entity. — BBC

WHAT WE’RE READING, COMEY EDITION

Behind Comey’s firing: an enraged Trump, fuming about Russia (Politico): “When he finally pulled the trigger, he didn’t call James Comey. He sent his longtime private security guard to deliver the termination letter in a manila folder … he had grown enraged by the Russia investigation, frustrated by his inability to control the mushrooming narrative around Russia.”

Donald Trump’s firing of James Comey (New York Times editorial board): “This is a tense and uncertain time in the nation’s history. The president, who is no more above the law than any other citizen, has now decisively crippled the F.B.I.’s ability to carry out an investigation of him and his associates.”

A moment of truth for US democracy (New Republic): “Our best hope is that Trump reached this decision because he is erratic and knavish, rather than because he is placing himself above the reach of the law … Trump wins his first and largest assault on competing institutions since his presidency began, and the nation’s slide into authoritarianism begins in earnest.”

This is not a drill (The Atlantic): “Perhaps the worst fears for the integrity of the U.S. government and U.S. institutions are being fulfilled. If this firing stands — and if Trump dares to announce a pliable replacement — the rule of law begins to shake and break. The law will answer to the president, not the president to the law.

The Comey debacle only magnifies the Russia mystery (Washington Post): “Trump has been digging a hole for himself from the beginning on Russia-related issues. It’s an odd pattern of behaviour. Trump may have done nothing improper involving Russia, but why does he act so defensive?”

WHAT WE’RE READING

Four reasons why talking to North Korea would be smart strategy (Defense One) “There is a seductive righteousness in refusing to sit down at a table with the world’s most repugnant regime. But Trump should not let short-term satisfaction get in the way of crafting an effective strategy to achieve American goals—or as Trump calls it, ‘winning’.”

Paul Allen’s high-tech quest to save the world’s most endangered animals (Bloomberg Pursuits) “If he has his way, Paul Allen will cover 90,000 square miles of African territory with smart sensors and drones by the end of this year to bring hyper-connectivity to Africa’s most remote, wildlife-packed corners. It’s the biggest, tech-focused conservation project to date, a command-and-control system for rangers to record and respond to poaching threats from Kenya to Tanzania.”

We are not done with state-sponsored hacking. Far from it (Monday Note) “It seems every election is likely to be disrupted by some form of hacking and the subsequent spread of fake news and stolen documents. Unfortunately, the problem won’t go away.”