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