There's been some telling fallout in the Treasurer's office since Anna Bligh was appointed CEO of the banking association 

Anna Bligh (foreground). Photo: Bradley Kanaris/Getty Images

Treasurer Scott Morrison said he will keep working with the banks directly, amid unhappiness within government over the appointment of former Queensland Labor Premier Anna Bligh as chief executive officer of the Australian Bankers’ Association.

“Only they can explain that,” Mr Morrison said of the ABA’s decision which has put noses out of joint within the Turnbull government.

“It’s not for me to be happy about it or not happy about. I will simply deal with whoever they put up.”

But Mr Morrison said as Treasurer, he dealt primarily with the bank chairmen and chief executive officers anyway, not “intermediaries” like the ABA.

On Sunday night, Mr Morrison’s communications director, Sasha Grebe, quit. Mr Grebe had applied for the ABA job.

Unlike his colleagues, Finance Minister Mathias Cormann was unperturbed about Ms Bligh’s appointment.

“That is entirely a matter for the Australian Bankers Association. I wish her luck and success in the job,” he said.

The banks have swung their support behind Mrs Bligh. Sources said they believed her appointment would make it harder to keep attacking the banks and demand a royal commission.

But the government regarded it as an insult because it alone has been defending the banks. The government also saw it as a sign the banks were forecasting a change of government at the next election.

Mr Morrison said he would “continue to deal with the ABA professionally”. He has just finished a round of meetings with chairmen and said he would continue to meet with CEOs.

Meanwhile, Mr Morrison told 2GB that raising taxes could threaten what are emerging signs of an economic recovery.

He is maintaining his warning that taxes will have to rise if the Senate blocks billions in budget cuts, as is anticipated, but stressed he has no desire to do so.

“Those who are opposing savings measures are, by implication…what they are saying is they want higher taxes,” he said.

“I don’t want higher taxes at all.’

Mr Morrison said the economy “today is better than it was a year ago” and the government “must be careful not to disrupt or ruin that”.

“Our number one priority is to grow the economy.”

The split within government over capital gains tax was again on display when Finance Minister Mathias Cormann declined to challenge Liberal MP John Alexander.

On Sunday, Mr Alexander told Sky News that people ought “listen very carefully” when the prime minister says he has no plans to change the capital gains tax.

“Are we working on plans? Yes we are,” Mr Alexander said.

Senator Cormann, who has no portfolio responsibility for tax, said: “I’m not working on any plans, I can assure you.”

This article first appeared on AFR.com. See the original article here. Follow the AFR on Facebook and Twitter.

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