Chris Bowen should stick to the policy proposal he carried to the last election, which was to put a 0.05 per cent annual price on the government’s currently free guarantee of deposits. This is consistent with written advice from the Reserve Bank and Treasury.
Via The Guardian:
Nick Xenophon says his Senate bloc will support the Turnbull government’s contentious $6bn bank levy if it is also applied to foreign-owed companies, not just the big five Australian banks.
The leader of the Nick Xenophon Team told the ABC on Sunday that applying the tax to foreign banks was now a precondition of his support and he would talk to Labor about attempting to lock in that position.
Xenophon said including the foreign-owned banks would raise an additional $750m or $800m over the forward estimates period.
“That itself could fund a last resort compensation scheme for the many tens of thousands of victims of financial mismanagement and fraud in this country, particularly those managed investment schemes where there are literally thousands of Australians whose lives have been devastated by them,” the Senate crossbencher said.
Chris Joye says no:
…you cannot logically extend the big bank levy to foreign banks, as Labor reportedly wants to do, because our government does not implicitly vouchsafe their solvency. Advocating this case means you favour applying the levy to all banks.
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Well…if they get free deposit insurance then they should pay, right? So should Australia’s smaller banks.
That rather implies that the levy should be 0.5% on all banks with an added 0.6% for the majors pricing the guarantee.
I wonder if some future government might not see the sense in that?
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