The Treasurer Scott Morrison has announced in the budget that banks with debts over $100 billion (Westpac, Commonwealth bank, amongst others). This levy increases by 0.06% for the July 1st and is estimated to raise approximately $1.5 billion in the next for years.
But who will pay for this increase in tax?
Well, the banks may increase interest rates or mortgage rates to compensate for their losses, despite the big 5 banks having a combined income of above $30 billion. Staff and shareholders may also need to foot the bill for this levy, as wages could decrease or share prices fall, all to keep the big banks profits up.
Another part of this budget, banks will be fined for stepping out of line. Senior bank staff who are found to be in breach of their obligations will be stripped of all pay rises and barred from holding executive roles. If entire banks breach their conducts, small banks will be fined $50million and larger banks fined $200million.
So what do you think about this new levy, will it work?