We shouldn't be taking up a deposit levy IF the banks were allowed to pass on that cost to investors/depositors.  

The concept was okay because it was to raise govt. funds to ensure our banking industry remains safe and can ensure that people with $250,000 held in separate financial institutions remain guaranteed of their money being paid to them, even if that particular bank collapses.

What should have a LEVY on it and would raise incredible amounts of funding is a BANK money transfer tax/levy.  This would be a cost to the bank only and would bring in even more to the government guarantees that they must meet.

Banks are oligopolies and therefore not really subject to market forces.... they are the market forces!  Hence, they should be made to contribute to the need for governments to guarantee ordinary Australians that their life savings are safe.  

These finacial megacorps earn BILLIONS every year, they CAN afford to contribute to their own backup or support mechanisms.  Why should the Australian government cough up money because banks get too greedy and collapse in the next stage of the financial crisis (many say it will hit quite badly in early 2016 but I have heard that before).  Another case of 'privatise your profits and socialise your losses'.

 ALSO to be remembered is this govt guarantee also gives overseas investors confidence in our financial system and hence, even more profits for BANKS and investments for Australia.  So they do have a very good obligation to contribute.

Example... you may not be rich but have just sold your home and getting ready to go into a 'village' and the bank fails.... without this guarantee, you lose ALL your savings not just the amount over $250,000.

NOTE:  If you have more than $250,000 in savings, then you should put amounts of $200,000 (to allow for interest) into different financial institutions because you will be covered then.  It is based on the $250,000 guarantee for each institution not each person.  When you are looking to deposit funds, ensure the bank is part of this Govt Guarantee scheme.  I know the Commonwealth Bank is, so I assume the other big Aust (by name only) banks are as well and other banks such as MeBank.

It seems odd that for two years the govt has had the 2 billion input on the budget figures yet never implemented it. For two years it had not dropped the levy from the books nor implemented the levy. Is that false accounting in normal business circles ?

Good news for the customer :)

Was a bad move which both govt and opposition were guilty of so for one to blame the other is foolish and does not wash with me.

But good the idea has finally been discarded.

Yes, the levy (TAX) was abolished and a higher GST considered. These hypocritical sods!

Crikey paywall

The hypocrisy extends beyond Hockey's backflip. In late 2008, to make sure our banks maintained access to wholesale funding markets, the Rudd government introduced a wholesale funding guarantee, funded by a very small fee on the banks. That (along with the government's deposit guarantee) helped the same banks that oppose the deposit tax scheme stay alive and in business, as did the Reserve Bank pumping over $60 billion into the entire financial system. It was so successful, the guarantee was only needed for six months before it was withdrawn.

But the fee turned out to be a great earner for government: the scheme finishes at the end of October this year, when the last of the guaranteed debt expires, and has generated $5.5 billion in revenue since late 2008. That’s close to $800 million a year for the budget bottom line -- and the banks have willingly gone on paying the fee (they have actually been repaying it faster than they had to because the cost of borrowings fell more quickly than expected).

Apart from helping both Wayne Swan and Joe Hockey's budget bottom line, the income from the guarantee fee ensured that Australia was one of the few countries in the world where the government was a net recipient of funds from the banking system as a result of the financial crisis (the RBA also received fees and interest income from its loans in late 2008 and early 2009 as well). The banks were willing to pay those fees and charges because the alternative was so frightening. Now that conditions have eased, interest rates are low and earnings are strong, the banks don’t want to know about risk management against a future financial crisis. And why would they when they know taxpayers will step up?