Surprise levy a blow to banks

Posted May 10, 2017

The Turnbull Government is starting afresh from Tony Abbott's horror 2014 budget, vowing to make the "right choices" for Australia.

"It's been a fair while since most hardworking Australians have had a decent pay rise", he said.

And in recognition of the pounding on health policy it received at the election a year ago, it wants to legislate a Medicare Guarantee Bill with a Medicare Guaranteed Fund to cover all expenses of the scheme.

ABC reported that a raft of sluggish bank results and news that the levy was likely to be unveiled in the budget had fuelled a big sell-off of bank stocks.

Treasurer Scott Morrison was not immediately available for comment.

The federal government is now on a collision course for a protracted battle with the "four pillars" of the nation's retail banking sector, along with Macquarie Bank, after Scott Morrison imposed a new "Major Bank Levy" that could wipe billions from their bottom lines.

Australia's big four banks, which earn around AUD30 billion, have been the subject of increased scrutiny.

"Data was one of the earliest success stories of this government as we increased the 500 datasets available in 2013 to more than 20,000 datasets now - and this has delivered real benefits in innovation", Taylor said last week.

A new Banking Executive Accountability regime will also be established, which requires all senior banking executives to register with APRA.

Welfare recipients that fail the test will be placed on the Government's cashless welfare card, which quarantines 80 per cent of welfare payments to a debit card to prevent recipients from spending money on drugs and alcohol.

This comes at a cost of $2.2 billion over four years.

Bollywood actor Vinod Khanna dies
Actor Vinod Khanna breathed his last at 11:20 am at the Sir HN Reliance Foundation Hospital in Mumbai on April 27, 2017 . Indian cricketing legend Sachin Tendulkar and a fellow parliamentarian condoled the death of Vinod Khanna .

There'll be an extra $115 million for mental health and an extra $1.4 billion for health research, including $65.9 million specifically for research into childhood cancers.

And the big element will be the 0.5 per cent increase in the Medicare levy to be paid by all singles earning $21,655 a year and above, and couples on $36,541, with additions for dependent children.

An extra $18.6 billion in funding over 10 years under Turnbull's Gonski 2.0 plan goes some way towards the Coalition restoring its education credentials, but is being complicated and potentially derailed by a fierce debate over Catholic school cuts.

In foreign policy, defense spending was projected to rise by 5.3 percent a year through to fiscal 2021, reaching almost A$34 billion. "We are not sending lawyers around the country for three years, we are acting now", the Treasurer said, in reference to a royal commission. "Taxpayers, including those who have never attended university, will still fund the majority of university fees and costs - around 54 per cent of the cost on average, as well as significantly subsidising the student loan scheme", he said.

The Treasurer said an extension of the rules involving foreign partnerships or trusts, plus new tax integrity measures recommended by the government's Black Economy Taskforce, would help raise a further $4 billion over the forward estimates.

"The only people paying higher taxes are large banks and the crackdown on multinationals and foreign investors", he replied.

As for the levy on banks: "We're not going to stand in the way of it".

But he rubbished the government's proposal to offer subsidised savings account to help first home buyers save a mortgage deposit.

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

Western Sydney airport will get $5.3 billion over the next ten years.