The Labor government will propose a multi-billion dollar new tax on banks that will be sold as insurance in case they need future bailouts, according to a report by Phil Coorey at The Australian Financial Review.
The Fin initially reported that the proposal, due to be revealed tomorrow, would introduce a 0.5% – 1% levy for the government to guarantee deposits worth up to $100,000. This has since been corrected to 0.05% – 0.1%.
The Australian Government has insured deposits worth up to $250,000 since February 2012.
Banks are likely to pass costs from the levy on to their customers by reducing interest payments on deposits, the Fin reports.
The scheme was reportedly recommended by the Council of Financial Regulators.
There’s more on the Fin.