Labor plans to slug banks another $640 million for a consumer compensation fund

Australian Labor Party Leader Bill Shorten. Photo: Mark Metcalfe/ Getty Images.

Bill Shorten will today announce a new levy on Australian banks to pay for a new Financial Rights Fund that will provide help for victims of misconduct in the banking sector.

The Australian Financial Review reports the new impost will raise $160 million a year over the four-year budget estimates period.

Unlike the bank liabilities tax, which applies just to the big four and Macquarie, the new fund proposed by the ALP will apply to all financial institutions in the ASX 100, meaning it will catch banks like Suncorp and Bank of Queensland.

A separate report in The Australian says the charges on banks will be linked to their market capitalisation.

At $120 million annually spread across a multitude of institutions, the new levy is unlikely to be material financially to the banks but it is a reflection of their status as a political target.

Half of the $640 million will be spent on doubling the number of taxpayer-funded financial counsellors to 1000, enabling the provision of financial advice to 125,000 people a year. Labor will announce the scheme today and explain this week how the remaining $320 million will be spent.

There’s more at the AFR >>

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