Budget 2015: Banks fear deposit tax will be introduced in federal budget

Piggy bank with coins

A tax on bank deposits that could raise more than $400 million looks set to be amongst the measures that Treasurer Joe Hockey will announce in tomorrow’s federal budget.

Consumers in Australia have never before been charged a tax for depositing money into a bank account.

However, according to the Australian Bankers Association’s chief executive, Steven Munchenberg, that looks set to change.

“This tax is actually an announcement of the former government, but it hasn’t been ruled out by the current Government and until they do it remains in the budget,” he said.

“So we were hoping that the Government would rule this tax out tomorrow. If it doesn’t, it means that they are on track to bring in a tax on people’s savings, on deposits that you have in the bank.”

From a consumer’s viewpoint the additional stability that this potentially will bring I think is very good.

Michael Witts, ING Direct

Mr Munchenberg said there has not been an equivalent impost on bank savings previously in Australia.

“The tax is being presented as necessary to fund, set up a big fund, in case a bank collapses in Australia, but we actually have a lot of other protections in Australia that make that extremely unlikely,” he argued.

“So all this is really going to do is take hundreds of millions of dollars that might otherwise have been paid as interest on peoples’ savings and give that money to the Government.


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