Now a bank tax, as Labor runs out of money again

[nero_bolt]

More scrabbling for cash by glad-spending Labor - and another tax:

The federal government will prop up the budget bottom line with a new levy on banks that will be badged as providing insurance in case future bailouts are needed.

The Australian Financial Review has learned that the government’s economic statement, set to be released Friday, will contain a deposit insurance levy as recommended by the Council of Financial Regulators, which will raise funds to underwrite any Australian bank should it need assistance in the future.

The proposed levy would be between 0.05 per cent and 0.1 per cent. Presently, the government guarantees deposits up to $250,000 without charging the banks.

A senior source said the levy ... would raise less than $1 billion over the forward estimates but build over the outer years.

The revenue raised by the levy will also be added to the budget bottom line, helping the government offset a forecast plunge in revenues since the May budget and meet its target of returning to surplus in 2016-17…

The source said while the money collected would count as revenue, should the fund ever be drawn upon it would count as expenditure.

But don’t call the bank tax a tax, just like you must not call the carbon tax a tax:

At a press conference Thursday morning, the Treasurer said “we have no plans to tax banks’’.

The original idea was for a levy half of what this desperate government now wants to charge:

[The Council of Financial Regulators] says a fee could be between 0.02 and 0.05 of a percentage point, set at the same rate for all institutions, and the funds collected in a “ring fenced” special purpose fund.

Commonwealtrh Bank shares took a hit:

And whose idea was this? From March 8:

The Australian Greens have proposed a new tax on the big four banks, in exchange for the federal government’s protection to ensure they do not fail…

The minority party has proposed a 0.2% fee on all bank assets above $100 billion, which would apply to ANZ Bank (ASX: ANZ), Commonwealth Bank (ASX: CBA), National Australia Bank (ASX: NAB) and Westpac Banking Corporation (ASX: WBC).

Since Rudd returned to the prime ministership, he has devastated the salary packaging industry, belted smokers, hit banks shares and slashed car sales.

[monman12]

JMK: "As for the banks, of course they'll pass it on to their customers, but it'll be proportionate to the deposits. I'd rather contribute painlessly, than be hit with a huge loss if the bank goes bust."

Go bust, that could never happen  if there was a depositor run it would be sovereign protected

"proportionate to the deposits" ?????????

0.05% is proportionate, codswallop JMK. if a bank went bust 1/2000 pa of deposit monies (below $250,000)  would hardly be a credible insurance pool, perhaps in a couple of hundred years it might help.

"S&P report acknowledged that Australian banks have one of strongest positions of any global banks."

Our banks had no trouble during the GFC, and as you are at pains to explain JMK we are AAA rated , and the big 4 banks AA-. There is not a chance that they will fail, and all this scheme will do is allow monies collected to show up as a + for the budget bottom line, but supposedly free from government clutches/spending.

What will happen to the monies raised by this levy (from 2016) if it actually eventuates?

nɥºɾ

[***super_nova***]

It is 0.05%, that means for every $1000 you pay 50cents per year.  Gosh, that will really hit me hard. 

[*mrgrizz*]

it's not a tax

the money is not going to be spent

[polksaladallie]

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@*mrgrizz* wrote:

it's not a tax

the money is not going to be spent

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Well, some of it wil be spent, but most of it will be in a fund, as insurance to protect small savers.

[icyfroth]

It's not a tax. It's a levy .05% of deposits over $250,000. It will be held as a security or a bail-in in case there's another big bank fail. Which they must be anticipating.

So now the government has no more money for a bail-out as in the last GFC, the banks will turn to the depositor's funds instead.

[freakiness]

Do you ever have an original thought or do you just parrot what those you adore say, Ray?

[the_hawk*]

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@icyfroth wrote:

It's not a tax. It's a levy .05% of deposits over $250,000. It will be held as a security or a bail-in in case there's another big bank fail. Which they must be anticipating.

So now the government has no more money for a bail-out as in the last GFC, the banks will turn to the depositor's funds instead.

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Icy I believe this latest money grag will be levied against all deposits, they already charge the banks on the larger deposits.

This new one will hit you when you get money and also spend it because the shop will just pass the cost on to the customer.

[the_hawk*]

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@***super_nova*** wrote:

It is 0.05%, that means for every $1000 you pay 50cents per year.  Gosh, that will really hit me hard. 

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It may not bother you on $1000 but it bothers me.

Its also not a yearly amount, its every time a deposit is made, again this affects people with investmenst as they move them around to get the best posible returns.

In my situation I can trasfer money around several times a year.

[not_an_eloi]

struth, someone's outed someone       

god, flamin' hate these flamin' siggies

[not_an_eloi]

siggies  emoticons