Thursday, 21 September, 2017

Banks hit with new levy, potentially costing billions

Treasurer Scott Morrison is planning to impose a tax on interbank transactions according to banking sources Treasurer Scott Morrison is planning to impose a tax on interbank transactions according to banking sources. Michael Mucci
Nellie Chapman | 19 May, 2017, 06:58

Australia's Treasurer Scott Morrison delivers the federal budget in the House of Representatives at Parliament House in Canberra, Australia, May 9, 2017.

"I believe though that we are now moving towards the end of this hard period".

They were never going to be passed by the Senate but their existence made the Budget bottom line look better than it actually was.

He cautioned the so-called Big Five - Commonwealth Bank, Westpac Banking, Australia and New Zealand Banking, National Australia Bank Ltd and Macquarie Group Ltd - against passing the costs on to consumers.

Despite boosted outlays, the Treasurer promised a $7.4 billion surplus in 2020-21 with no borrowing for recurrent spending, which cover the day-to-day bills from running the government.

The Treasurer forecasts a slightly wider deficit than expected for the coming year, but projects that the country's 12th-straight shortfall (in 2019-20) will bring the government's run of red ink to an end.

"This budget will be committed to fairness, opportunity and security, ensuring that Australians are given the opportunity to get ahead, the economic growth that enables them to get ahead, to get a better job, a better-paying job, to start a business, grow a business, to realize their dreams", Turnbull told reporters.

The Medicare levy has also been raised from 2 to 2.5 per cent to pay for Labor's National Disability Insurance Scheme, which will be fully rolled out by 2020, a raise that will impact almost every taxpayer.

Spending on hospitals will increase by $2.8 billion over four years.

Uni students will pay more for tertiary education with a 2.5 per cent efficiency dividend introduced.

A $1.2 billion skills fund to provide new apprenticeships will be paid for by a foreign worker levy.

"It just doesn't make sense", Ms Westacott said.

"We need to understand that makes sensitivity to the services they rely on and cost of living that much more great".

Morrison said the government will establish a A$1 billion National Housing Infrastructure Facility and allow first time home buyers to save extra funds into their pension accounts to use for a purchase deposit.

Contributions and earnings will be taxed at 15 per cent rather than at marginal rates.

Older Australians wanting to downsize will be able to put in up to $300,000 from the sale of their homes as a top up on their superannuation.

There will be a national housing finance corporation established from July next year to offer long-term, low-priced finance to community housing providers for affordable housing. "It's $8 billion. A tax increase which affects nearly every working Australian", he said.

Schools will received $18.6 billion in extra funding.

That's expected to generate 60,000 jobs in the long term.

However, economists have said such measures would help only at the margin, given the government's reluctance to tweak a tax treatment on property massively favored by the wealthy known as 'negative gearing'.