Budget 2017: Banks and government at war over 'lazy' banking levy

Gladys Abbott
May 20, 2017

"If the government is looking for some extra money, they don't need to give a tax cut to millionaires on July 1 and they don't need to go ahead with corporate tax cuts".

Morrison said $6.2bn would be raised over four years by the new levy on big five: ANZ Bank, Westpac, National Australia Bank, Commonwealth, and Macquarie.

The budget deficit will be $29.4 billion in 2017-18, improving to a surplus of $7.4 billion by 2020-21.

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

Running parallel to the Government's nation-building programs is the concentration on health, with a $10 billion spending increase over four years, in part to counter the risk of Labor again use the policy area to attack the Coalition.

The government is also planning to impose a 50% on foreign ownership in new property developments, which the government sees as a way of "increasing the housing stock for Australian purchasers".

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.

He also urged customers to shop around if they felt they were not getting a good deal pointing out that smaller regional banks were not affected by the levy.

"This budget is about making the right choices to secure the better days ahead", Mr Morrison told parliament on Tuesday.

More news: Telecom sector disappointed with 18% GST rates

Treasurer Scott Morrison said the country's profitable banks, which have been under fire in recent months amid a series of misconduct scandals, would bear the brunt of a budget "re-set" as he abandoned so-called "zombie savings" worth some A$13 billion. There will be a drug testing trial for 5,000 new welfare recipients.

The budget forecast real GDP at 2.75 percent in 2017/18, strengthening to 3 percent through to 2020/21. The surpluses projected are not enough to pay back debt.

The extra Medicare levy revenue will be directed into a new fund, which will be used to fund the National Disability Insurance Scheme (NDIS). They would also have to pay between $3000 and $5000 to bring in a worker on a permanent skilled visas.

Downsizers over the age of 65 will be able to make a non-concessional contribution of up to $300,000 into their super fund from selling the family home.

A housing affordability package includes a "first home super savers scheme" that will provide a tax cut for those trying to get a deposit together. The inland rail line, to receive A$8.4 billion in funding, will run from Melbourne to Brisbane, spanning 1,700km, and will help farmers to move produce and exports.

Work will commence in late 2018 and airport operations will begin by 2026, creating some 20,000 jobs.

The initiative is expected to facilitate more than $15 billion in Government asset sales and unlock $17 billion in infrastructure spending.

In March, The Daily Telegraph reported that government ministers were looking at some of the avenues by which such a tax could be applied.

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