Nick Reade, BankSA’s CEO, has not ruled out the possibility that variable mortgage rates for customers might increase based on their postcodes. This move would be in response to the South Australian government’s new bank levy.

SA Treasurer Tom Koutsantonis revealed plans to impose a levy on the big banks in last week’s state budget, with the measure set to raise an estimated $370m over the next four years.

Analysts have warned that the big banks could respond aggressively to the state-based bank levy, with rate rises for SA mortgages and a brake on business lending among the options.

The levy could also negatively impact jobs and the overall economy in SA, analysts said.

Their predictions are already bearing fruit: BankSA just put plans to create 150 new jobs in South Australia on hold following the announcement.

When questioned about increasing variable rates for customers, Reade told ABC Radio Adelaide that his bank might increase rates for customers with postcodes that begin with the number five—a move that would capture its SA residential and business customers.

“I can’t comment at this stage because it’s too early,” Reade said. “I haven’t had a chance to understand the implications [of the levy] and we haven’t seen the legislation. I don’t understand how it all works to be honest, we’re trying to get more information on it, but on the surface we’re going to have to look at our operations.”

State Opposition Leader Steven Marshall said the Liberal Party would not block the new measure, but would assess whether supporting the bank levy was in the best interests of South Australians.

“We will be looking at this budget measure [because] we’re not convinced that it’s good for South Australia,” he said.
 

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