How much will the bank levy cost you?

As Scott Morrison continues his war with the big banks, one prominent think tank has calculated how much the Federal Treasurer’s bank levy will cost the average Australian.

The Australia Institute (TAI) has worked out that, should the big banks pass on the cost of the Federal Government’s bank levy, announced in Budget 2017/18, Australians will be less than $10 per year out of pocket.

The banks have said they would pass the cost of the levy onto shareholders through reduced dividends. So the average superannuation balance would be $7 worse off each year.

Most Australians with a super account are shareholders in banks through their super fund investments. TAI’s study reveals that, in 2015/16, the average super balance held around $3141 worth of shares in the big five banks, and received around $161 in dividends.

If the banks passed on the levy to customers, it would cost them about 60 cents per month.

Scott Morrison has been calling on customers to ditch their banks if they pass on the levy. TAI’s report revealed that if customers were to move to a smaller bank, they could save $6,096 in interest per year (based on the average mortgage amount).

“Ironically, if the banks choosing to pass on the levy to customers led to people shopping around, mortgage holders could be big winners,” said TAI’s Senior Economist Matt Grudnoff.

Mr Grudnoff also said that if the banks want to benefit from a government guarantee that they would be bailed out of financial difficulty, then they should have to pay for this insurance.

Mr Morrison says it’s necessary for the banks to accept the levy to support schools, hospitals and pension payments.

“Many other Australians have had to deal with some hard decisions we have had to make over the last four years,” said Mr Morrison. “It’s a fair levy, it’s a reasonable levy, it’s in place in other countries around the world and it’s also a levy that banks are in a position to support.”

Read more at The Australia Institute

Do you think this is fair? Should the banks just swallow the cost? Or are you happy to lose $10 per year to support spending elsewhere? Isn’t this just another tax on us?

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