Australian government scraps bank deposit tax
(2 September 2015 - Australia) The Abbott government has dumped plans to introduce the bank deposit tax which was first proposed by Labor in 2013.
The bank deposit levy would be a 0.05 percent levy on every deposit of up to A$250,000 which would meet the future costs of the Financial Claims Scheme (FCS). The FCS protects depositors by guaranteeing deposits of up to A$250,000 held in banks and other Authorised Deposit-taking Institutions.
It was scheduled to start on January 1, 2016, and was budgeted to raise about A$500 million a year and cover the cost if a bank needed to be bailed out.
Mr. Abbott said: "The good news for the people of Australia today is that Labor's bank deposit tax is dead. It's very important that our banks are safe and secure and the best way to ensure that we have safe and secure banks is to have a very good prudential regulatory system, and that's exactly what we have: we have a strong prudential system which means that our banks are about the safest in the world. The last way to make our banks strong, the last way to protect depositors, is to hit banks with more taxes. That's the Labor way. It's not the Coalition's way
Commonwealth Bank Chief Executive Ian Narev said: “Today’s policy decision strikes the right balance between maintaining confidence and supporting economic growth. The Australian banking system is strong and resilient without the need to impose additional costs on savers and investors.
“We congratulate the Government for its constructive consultation on this important policy decision, as demonstrated throughout the FSI process.”
Subscribe