Based on Westpac Banking Corporation’s balance sheet at 31 March 2017,

Based on Westpac Banking Corporation’s balance sheet at 31 March 2017, recently announced 0.06% (6 basis points) levy in the 2017 Federal Budget will apply to approximately $615 billion of Westpac’s liabilities (‘Impacted liabilities’). However, the impacted liabilities would exclude certain prescribed items including approximately $174 billion of financial claims scheme eligible deposits. The Levy is expected to be tax deductible, but will not attract franking credits (Australian tax imputation credits). Based on the estimates, that represents a cost of around $370 million or around $260 million after tax. However, the exact cost will depend on the final form of the new legislation passed and the composition of Westpac’s liabilities. The impact of the Levy for shareholders was estimated at around 8 cents per share, which represents 4.3% of dividends paid (188 cents per share) in 2016.

 

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