Bank tax to slug savers

Kevin Rudd’s plan to a bank deposit tax could see savers slugged on interest.

Bank tax to slug savers

Kevin Rudd’s plan to impose an insurance levy on all bank deposits could see savers slugged on interest. The 0.05 per cent levy on all deposits up to $250,000 would allow the Government to boost its bottom line on the budget balance sheet, but in essence the money is unlikely to ever be used. The money will be collected by APRA and placed in a Financial Stability Fund to bail out any failed banks in the future.

So, what will this mean for savers? Banks have already indicated that any deposit tax would be passed on as a savings tax and would result in a customer with $100,000 in the bank losing $4 in interest. The Government claims the average household has $10,000 in the bank and therefore the loss would be less than 50c per month.

Do you think there is a need for this levy? Are the banks right to pass it on to savers or should they just absorb the costs as the fund may benefit them in the long run?





    COMMENTS

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    Beemee
    28th Aug 2013
    11:29am
    No it is not necessary, well I am going for Abbott and I don't care what he does as he most certainly can't be as bad or worse than Rudd.
    For crying out loud we already get 0.01% up to $2,000 by the auto Government interest, and we are going to lose some of that!! Oh gimme a break.
    Greed, greed, greed, nothing more and nothing less. The Govt can't manage money now, and ripping us off even more is downright daylight robbery.
    The old tin can buried in the back yard is sounding better and better by the day. You can't rip off what I don't have in the bank.
    surfer
    28th Aug 2013
    11:53am
    Agree totally with everything you say. Nothing could be as bad as the garden gnome running around promicing more billions. He is an incompetant fool and has never had the ability to manage our economy and never will.
    PlanB
    28th Aug 2013
    11:45am
    Well doing the figures it said if you have $100.000 in the bank you would lose $4 THEN it says with $10.000 in the bank it would be 50 cents per month-- which is adds to $6 !?
    Beemee
    29th Aug 2013
    3:44pm
    Do the math and it'll scare ya. On 100,000 its $50 annually. Who wait a minute, there are 12 months in a year and it should be 48.00
    Nope the dirty sods are doing the rip off. add 4 years together 3 x 365 days plus 366 days: total 1461 days AND divide by 48 months for the 4 years, comes to 30.4375 days per month, that they will hit you with this 0.05%. The banks never work on the days or months we do, they don't miss a trick and give you a free day in a leap year.
    Time to start draining the bank, doing so will give the bank no ready cash to play with, and they will hurt if enough do it. We only have to look back to the past when investments have gone sour or interest rates fall, and many people go in and withdraw all their savings. They screamed loudly then. If we all had the guts to do it and not just a few, we could really send them a very strong message.
    PlanB
    28th Aug 2013
    12:02pm
    I sure want my meagre amount safe
    Beemee
    29th Aug 2013
    3:46pm
    Could not agree with you more PlanB, I might not have thousands but what little I have is put aside for our funeral so the one remaining doesn't have a huge bill to face.
    Nabshe
    28th Aug 2013
    12:05pm
    I have a substantial amount in Term Deposits that would mean a $20 per month hit - that money is invested as a counterbalance to my allocated pension which comes from a Retirement Superfund. If this goes ahead, guess what? I will be taking ALL of this money OUT of the Bank and investing it elsewhere-my local bank will not be happy. But if they want to screw me then I will have no choice. Oh yeah, and no matter which politician gets in Tony Abbott will also hit us with his PPL scheme, which will be recouped by big companies through hits to the franking credits on dividends. This reminds me why I HATE politicians....even prostitutes rank higher on the trustworthy scale!
    Anonymous
    28th Aug 2013
    12:50pm
    but Nabshe - you have to pay a prostitute to get screwed ; the pollies screw you for free.
    Wstaton
    28th Aug 2013
    4:23pm
    Yes the banks do to. We should remeber that the Banks take no reponsibility for safegarding their depositors and investors when you think about it.
    Pass the Ductape
    28th Aug 2013
    12:29pm
    Absorb the cost? You have to be joking!!! Since when has any bank absorbed the cost? Oh, they lie through their teeth at times and SAY they do, but in reality it's always the customer who pays. What the dickens is this hopeless labour Government think its doing, dreaming up some hair-brained scheme like this. If I wasn't convinced before, I am now. NO TO LABOUR!
    talofa
    28th Aug 2013
    1:31pm
    both the main parties look nasty to me
    as for 'savings'
    how about reducing the number of politicians on both sides ...federal & state...too many
    generals & not enough soldiers talofa
    hmmm
    28th Aug 2013
    1:50pm
    I think at the time of federation we only had about 3 taxes. anyone know how many we have now ?
    Beemee
    29th Aug 2013
    3:49pm
    Australians pay at least 125 different taxes each year. Of these, 99 are levied by the Australian government (including 67 agricultural levies), 25 by the States and 1 (council rates) by local government. The exact number of taxes is difficult to determine and may be higher than these estimates. This reflects ambiguity in distinguishing when a payment to government represents a separate tax or part of a broader tax and whether a payment is a tax rather than a fee for service (see Box 2.2 for further discussion). The estimates above take a conservative approach to these issues and therefore may understate the number of taxes paid by Australians.

    Similarly, the estimates treat equivalent taxes levied by different States as one tax rather than up to eight different taxes. From the perspective of individuals or businesses operating across more than one jurisdiction, equivalent taxes levied by different States might be viewed as separate taxes, since they need to be accounted for separately and typically differ in terms of rates, thresholds and exemptions. Viewed from this perspective, there could be as many as 160 different state taxes (excluding local government rates) and 259 taxes nationally (excluding local government rates).
    Beemee
    29th Aug 2013
    3:50pm
    http://www.taxreview.treasury.gov.au/content/Paper.aspx?doc=html/publications/papers/report/section_2-03.htm

    Forgot to add the link if you wish to read yourself, if not the main 2.3 article is above this posting.
    MITZY
    29th Aug 2013
    4:37pm
    hmmm/beemee: My very first job was in the Taxation Office in Martin Place, Sydney. During a working career I have been in various other industries but the majority of time either in law or accounting firms. In 1957 when I first started work I can remember even then how much tax law volumes there were. My very last place of employment, again in accounting, just had to keep building one book case after another from floor to ceiling just to house Butterworths Income Tax Law & Practice and then of course in later years the more popular CCH volumes. Its about 15 or more years since I last worked permanently but maybe the law is now available on the Internet and offices may have regained their walls!
    Jurassicgeek
    28th Aug 2013
    2:29pm
    just another govt and bank cash grab...wont affect most pensioners because we are so well ooked after by the govt and the banks....good name for them both bloodsuckers...
    moke
    28th Aug 2013
    4:41pm
    Lets hope that the pollies bank their loot it should make the banks a nice profit, but hard on the poor workers and pensioners. Banks are Money Grabbers of the Worst Kind they don't even offer real service any more.
    Joyrider
    28th Aug 2013
    5:25pm
    The levy on savings is very unfair as it is effectively a flat tax on savings irrespective of income or assets. Pensioners and self funded retirees will pay the same rate as million dollars earners. It is not like the A.T.O. Taxes where at least some attempt is made to have taxation reflect one's earning capacity. This gross raid on savings is all the more obnoxious as it has been proposed by the Labor Party who supposedly has worker's interests at heart. Please keep in mind that bank type savings are already behind the eight ball as current earning rates are in many cases well below the inflation rate.
    Anonymous
    28th Aug 2013
    5:49pm
    Don't blame the banks. They didnt ask for no levy. Government interference in free enterprise yet again.
    mouse39
    28th Aug 2013
    6:24pm
    Here we go again, Typical damn government and at what point are they going to take a PAYCUT instead of a Pay rise!!!
    As usual the little people suffer. Who be the day they stop this rubbish!!
    Good to see we are all being discouraged from SAVING anything. RUDD you and your government SUCK and have no damn idea!! GO chase the million and billionaires for a change... Oh hang on that would include YOU!!!
    Nightshade
    28th Aug 2013
    10:49pm
    WE ARE TALKING ABOUT A BAIL-IN .
    STEP ONE.
    HOW LONG BEFORE THEY COME TO OUR DOORS & DEMAND WE HAND OVER OUR PERSONAL ASSETS .../?

    THE C.E.C. POLITICAL PARTY HAS BEEN GOING ON ABOUT THE BANKS & THIS VERY THING ON THEIR T.V. PROGRAM ON CH: 31 & THEIR WEBSITE, FOR A LONG TIME NOW.
    (I do not in any way belong to their party)

    WE NEED THE GLASS-STEAGALL TO BE REINSTATED.
    INDEED MANY POLITICAL PERSONS IN MANY NATIONS AROUND THE WORLD INCLUDING AMERICA, ARE WORKING VERY HARD TO HAVE GLASS-STEAGALL REINSTATED.

    They have lost the plot & the wealth of this nation.
    They have allowed the banks & themselves to gamble & loose the wealth of our nation.
    And - somehow they think we have it & are trying to claw it back for us for themselves.
    Certainly not for us or Australia.
    ALL LIES ASIDE
    It would be interesting to know how bad the financial damage to Australia really is.
    Nightshade
    28th Aug 2013
    11:06pm
    Thank God we do not have GOLD TEETH any more -
    They would come with pliers
    Could you imagine the scene at the front door.
    "quick grab him,'
    "hold the bastard down,so I can get a good grip on it."
    Nightshade
    28th Aug 2013
    11:48pm
    First they came for the communists
    & I did not speak out because I was not a communist.
    Then they came for the socialists
    & I did not speak out because I was not a socialist.
    Then they came for the trade unionists,
    & I did not speak out because I was not a trade unionist.
    Then they came for me,
    & there was no one left to speak for me.

    Pastor Martin Niemoller (1892-1984)
    Nazi Germany :-
    Nightshade
    29th Aug 2013
    2:23am
    Around 18 years ago or so, my neighbor Trevor who lives 2 blocks up & Peter who live 7 houses down.
    Came across some rain water tanks for sale "dirt cheap" we were all interested.
    Trevor rang the council & asked if it was okay for us to install them in our back yards, sure that it would be okay.
    "DEFINITELY NOT" was the response from the local council .
    SO .......
    Peter ran, thinking that he could be more persuasive.
    "DEFINITELY NOT" was the reply from the local council.
    A few months later all the residents in the shire received a letter from the council to say that a COMPULSORY CHECK OF OUR BACK YARDS WAS ABOUT TO HAPPEN TO SEE THAT THE RAIN WATER WAS GOING IN THE RIGHT PLACE ; down the drains & FINE'S WOULD BE ISSUED.
    The rate payers paid for the mail out & the inspection.
    HOLA
    29th Aug 2013
    11:22am
    I am clearing my land of an old fence and overgrown bushes. I was going to get a skip bin delivered to my home. As I have a narrow driveway I was told by the bin people to ring the council as I would need a permit to have it out on the grassy area outside, rang the council and was told I needed a permit and it would cost $100.00. Aren't they mongrels? It was not interfering with pedestrians. Any day you can see in surrounding streets cars parked on the grassy areas and the church next door has cars parked everywhere when there is a service on, they also park in front of the Australia Post mail box.

    29th Aug 2013
    1:10pm
    Folks get interest on their savings, which is really money for nothing...so a levy that takes 1 to 2 a month is not going to make anyone lose. If I get $100 interest a month on savings what is a levy of $5 to me...... nothing..it does not come out of savings.

    Folks need to learn, there's savings and there's the interest, so long as your savings isn't touched WHO CARES, stop being a lot of greedy buggers and do something to help your country. Some pensioners are making a fortune in earnings from their Super savings too, and they still have the hide to complain, when you pay NO tax on super earnings of income stream payments. What do you folks wan?...we get so many things free or cheaper SO stop your whinning, GROW UP and act your age.
    Beemee
    29th Aug 2013
    3:56pm
    And you don't think the .05% will be passed on? It already does in many other ways because I am seeing it my bank.
    If I go to bank A I can get .5% on average better interest rate on our funeral savings than I do now at Bank B. But I get less because I don't pay for cheques as they a free for a pensioners. Great, I don't use darn cheques. So tell me I am not paying and it isn't affecting the increments I get monthly, measly as they are on what we have saved, but it would be nice to have the little I have left alone.
    If you aren't concerned with it, you must have way more money than I have.
    seth
    29th Aug 2013
    4:14pm
    What a great outlook, bank interest is money for nothing,??? did you not earn the money you have by work etc? the interest you get may or may not be in line with inflation, so the interest you get is just retaining your money value, not forgetting with the gst, you have already lost 10% of spending value no matter how much you have.
    Joyrider
    29th Aug 2013
    6:13pm
    Depending on your situation, your interest rate on savings may be maintaining your capital's real value or may be not. Nevertheless the levy is a theft of capital as it is not a tax on earnings. It is a tax on capital. Maybe your house will be next. If your capital was indexed for inflation, as almost all government charges are, the majority of savings accounts would show an annual loss. This loss should be claimable against gross earnings. Please note that capital gains taxes recognize effects of inflation.
    Beemee
    29th Aug 2013
    7:13pm
    Interest is money for nothing?
    Oh please, know this. The banks take our money and invest it in higher interest bearing venues, needless to say those avenues are not available to you and me. They earn an extremely high interest rate and dole out a pittance to us as a grateful thanks to adding to their multimillion to invest to raise even more money. Take a long look at the Commonwealth bank and others who have net profits in the millions. And where do they get that from? Suckers like us who put our little hundreds or perhaps a few thousand in the bank so the banks can bundle it all together and make a huge amount in interest.
    The small amount of interest I earn will be almost eaten away by this so called small 0.05% annually.