Macquarie Group says a $66 million bank tax bill might drive it offshore

Macquarie Group has lashed out at the Federal Government's banking levy, and hinted it is potentially looking at moving offshore to avoid the new impost, reports ABC news.

Chairman Peter Warne told the group's Annual General Meeting in Melbourne, Macquarie should not have been included with the big retail banks in being liable for the tax.

"The new tax will have a disproportionately higher impact on Macquarie Bank compared to the major Australian banks given our business mix is more heavily weighted to wholesale and international business," Mr Warne told his shareholders.

"Given the relatively small size of our Australian banking business we were surprised by our inclusion in the group to pay this levy."

However, Treasury should not assume it will be able to bank the cheque from Macquarie just yet.

"[Macquarie will] continue to review our business mix and location to ensure all our businesses remain profitable and internationally competitive, noting that our international competitors are not subject to this tax," Mr Warne said.

Macquarie estimates the levy will cost it about $66 million in pre-tax earnings every year, which it says means an effective tax rate of 41 per cent.

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The six basis point levy on the big four banks, as well as Macquarie, was outlined in the last federal budget, and passed the Parliament in June.

"We have also expressed our concern to the government given the benefit we bring to domestic competition and innovation, the role we play in bringing offshore income into the Australian economy, and the potential for unintended consequences resulting from the levy," Mr Warne said.

Macquarie Group reaffirmed its full year profit guidance, with results expected to be roughly in line with last year's $2.2 billion profit.

CEO's $18.7 million pay endorsed

Executive remuneration has raised eyebrows in the past, but the shareholder vote to endorse pay sailed through relatively unscathed despite talk of proxy advisors ISS pushing for a first strike vote on executive pay and the Australian Shareholders' Association demanding greater transparency.

In the end, only 15 per cent of the vote was cast against adopting the remuneration report, well short of the 25 per cent needed for a "first strike."

Chief executive Nicholas Moore will retain his spot as Australia's highest paid executive with an $18.7 million package, while two other Macquarie executives earn around $17 million.

Outside the meeting, the ABC spoke to a number of shareholders. Most were pleased with the bank's performance over the past year, and that trumped worries about executive pay.

"I haven't really worried too much about it because I think they have been performing all right with their profits, so that's what I look at," said one investor.

Another said, "I guess as long as a fair portion of it is performance based, if they performs well then I'm happy with that."




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