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Australian Federal Government Set To Introduce Tax On Bank Deposits – Is US Next?

Taxes (and/or negative deposit rates) are hitting European countries and now taxes are being levied on bank deposits in Australia.

The Federal Government looks set to introduce a tax on bank deposits in the May budget.

The idea of a bank deposit tax was raised by Labor in 2013 and was criticised by Tony Abbott at the time.

Assistant Treasurer Josh Frydenberg has indicated an announcement on the new tax could be made before the budget.

The Government is heading for a fight with the banking industry, which has warned it will have to pass the cost back onto customers.

Mr Frydenberg is a member of the Government’s Expenditure Review Committee but has refused to provide any details.

“Any announcements or decisions around this proposed policy which we discussed at the last election will be made in the lead up or on budget night,” he said.

Speaking at the Victorian Liberal State Council meeting Mr Abbott has repeated his budget message, focusing on families and small businesses.

“There will be tough decisions in this year’s budget as there must be, but there will also be good news.”

The banking industry has raised concerns about a deposit tax, saying it will have to pass the cost back onto customers.

Steven Munchenberg from the Australian Bankers’ Association said it would be a damaging move for the Government.

“It’s going to make it harder for banks to raise deposits which are an important way of funding banks. And therefore for us to fund the economy,” he said.

“And we also oppose it because particularly at this point in time with low interest rates a lot of people who are relying on their savings for their incomes are already seeing very low returns and this will actually mean they get even less money.”

Will taxes or negative deposit rates be coming to a US bank? Stay tuned!

Next thing you know they will be taxing those shrimp on the barbie. Oh wait! They already do … when you purchase the shrimp, the barbie, and the fuel!

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