Note: AFR article was updated after I posted: see Volrathy's post below, proposed levy is between 0.05 per cent and 0.1 per cent not 0.5 and 1 percent as originally reported. http://www.afr.com/p/national/bank_deposits_taxed_for_bailout_AKvDLh8Z36mmzu3VQ2lhVJ Edited for over-sensantionalized heading
An outright fiddle!. ..and you can bet your socks the government will keep the 'levy', and issue OZ Treasury Bonds instead of cash to those depositors. There will be NIL market for those Bonds. Currently, the OZ government is so far in debt they have NIL money for anything much, it is ALL borrowed. Those with over $100,000 can whistle for their money, IF they are lucky. OC
wait...so the GFC deposit guarantees are now going to be charged? How is this not like paying an insurance premium? What about the banks refusing to pay the levy but also forgoing any bailout protection? Yes, I didn't think that would be the case, either. However, it will ultimately be small bank customers that will get screwed over by this.
all government taxes and levies goes into consolidated revenue as per the constitution http://www.austlii.edu.au/au/legis/cth/consol_act/coaca430/s81.html Consolidated Revenue Fund All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution. There is no setting aside xyz money for xyz purpose it all goes into Consolidated Revenue and divided out from there. Basically this new tax / levy is a way to increase revenue
they (Australian financial review) have now edited the article The federal government will prop up the budget bottom line with a new levy on banks that will be badged as providing insurance in case future bailouts are needed. The Australian Financial Review has learned that the government's economic statement, set to be released Friday, will contain a deposit insurance levy as recommended by the Council of Financial Regulators, which will raise funds to underwrite any Australian bank should it need assistance in the future. The proposed levy would be between 0.05 per cent and 0.1 per cent. Presently, the government guarantees deposits up to $250,000 without charging the banks.
I didn't know the government guarentees deposites up to 250,000. So what does that mean? if the bank loses your money the feds will steal money from someone else to give it back to you?
No, the government will give you a worthless bit of paper. Convertible to cash in 20 years. IF you are lucky!
Cos the poor struggling banks can't possibly let anything affect their miniscule profits - somebody else must pay
Now what will the few big savers do.. If you by some miracle you have $500k in a bank, would you not split it up and put $100k in four banks? Then it is all insured. Will this move frighten SMSF people from holding large sums of cash...You have to have it somewhere! Where will they put their super funds..I know RE and the share market....green shoots again. TIC..Maybe it was a mistake to sell the Commonwealth Bank..When the government owned it and all the funds were insured .. There is no such thing as a free lunch.. $250 Insurance in 2008, $100k Insurance in 2013 and ? Insurance WTSHTF. Cyprus here we come, surely not, It couldnt happen here in Australia, could it? Now I remember, Uncle Ben did give two of our banks $4.6 billion in 08..Maybe he will do it again. Regards Errol 43
For about the 10th time, Ben Bernanke did NOT, I repeat, did NOT "give" the OZ banks $4 Billion in 2008. They LENT money to many banks OVERNIGHT at the normal OVERNIGHT interest rate, to balance their books. EVERY one of those advances were REPAID the following morning, and often RE BORROWED the next night GEDDIT?
