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Senator Derryn Hinch has called for the Australian Federal Police to investigate a leak that led to $14 billion being wiped off banking stocks in the hours before the federal budget.
"The biggest story today wasn't the super tax on banks, it was the leak," Senator Hinch told Fairfax Media.
Banks angered at new tax
Analysts suggest banks will be able to partly offset the government's $6.2b levy by passing it on to customers. Clancy Yeates reports.
The independent senator wrote to AFP Commissioner Andrew Colvin on Wednesday accusing the government of insider trading and requested a full investigation into the release of market sensitive information hours before the budget.
"It appears to me to be a classic case of criminal insider trading involving the federal government," he said. "It is a very serious thing, it could be a politician."
Senator Hinch said the AFP should investigate who shorted bank shares on Tuesday in the lead up to the budget.
Reports of a bank levy were first aired on Sky News on Monday night, triggering a 3 per cent fall for the country's biggest bank, the Commonwealth Bank, when the market opened on Tuesday before stabilising.
It shed another percentage point on Tuesday afternoon as more detailed reports of the levy started to emerge.
At 12.20pm on Tuesday - seven hours before the budget was officially announced and in the middle of market trading- the Australian Financial Review published details of the policy, quoting "banking sources" who confirmed the tax would apply to banks' aggregate liabilities and come out of retained profits. All of the details contained in that report, including the $6 billion revenue figure, were later confirmed in the budget.
By market close the other big four banks and Macquarie all fell several percentage points, wiping $14 billion from their value
A Macquarie spokeswoman said that "while there was media speculation earlier yesterday of the possibility of a bank levy", the bank only learnt of the government's policy as the budget was being delivered and after the market had closed.
Macquarie was in compliance with ASX disclosure rules, she said.
Treasurer Scott Morrison said on Wednesday at his National Press Club address he had "not seen any evidence" of a leak and suggested the media had fuelled the market through "budget speculation".
"I've worked out how it works with the media. You work out every potential scenario that could possibly happen in the budget, you write it in the paper and at the end of the day, you predicted dawn," he said.
He added that if there were any serious issues that needed to be addressed, "the [Treasury] secretary and I will be addressing them appropriately on the basis of the evidence."
Senator Hinch has called on the AFP to investigate leaks in the hours leading up to the lock-up.
It is understood Treasury monitors laptops and smartphones capable of transmitting information during the lock-up, which begins at 1.30pm, and it has no knowledge of any budget leaks.
Dean Paatsch, director at the governance advisory firm Ownership Matters, said "anyone with half a brain" would have known that news of the policy would move the market.
He said it was worth investigating whether traders were selling based on the media reports or if they were acting on more detailed leaks of the policy.
"There's plenty of people who knew, there's plenty of opportunities for leaks," Mr Paatsch said.
"It's worth investigating who knew what when, and whether that actually impacted on trading. We can't run a market based on what an advisor might have whispered to someone."