Samantha Maiden, Online political editor | October 22, 2008
THE proposed government levy for guaranteeing bank deposits of more than $1 million will be charged regardless of whether the investor wants it or not. Wayne Swan said today the new revenue raiser, which the Australian Bankers Association has described as a tax, will not allow for any investors to “opt out” of the scheme.
While the new laws covering an unlimited, free deposit guarantee have already passed Parliament, the Government plans to amend the laws to introduce a threshold after which a fee will be charged.
In Parliament, the Coalition asked whether investors who were not worried about their term deposits would be forced to pay the fee.
"Will this fee be compulsory?" Opposition treasury spokeswoman Julie Bishop asked.
In response, Mr Swan confirmed all depositors with large lump sums beyond a figure that is expected to be around $1 million will have to pay up.
"The very simple answer is the fee will be paid by all depositors. The fee will be either paid by the depositor or the bank,” he said.
Mr Swan said today the Government would not be releasing the correspondence between Treasury Secretary Ken Henry and Reserve Bank governor Glenn Stevens on a possible cap on the bank deposit - the subject of heated exchanges in Senate estimates today.
"I don't see why we would be publishing all of the advice or any of the advice that is coming through from individual agencies or between individual agencies," Mr Swan said during a press conference to discuss the latest inflation figures.
Dr Henry told the Senate estimates hearing this afternoon that he had spoken to Mr Swan after his press conference.
The Treasury secretary also spent a good deal of time debating the difference between a cap on the scheme, as Mr Stevens refers to it in written advice to Dr Henry last Friday, and a threshold beyond which a fee would apply.
"I don't believe the Government has that under consideration," he said. "It would certainly not be on my advice."
Mr Swan said today the Government was considering any necessary refinements to the guarantee, including a fee for deposits beyond the threshold of $1 million.
“The RBA has been discussing it with the Treasury,” Mr Swan said. “Those discussions started ... last Wednesday, and the government has been consulting with industry about those matters since then and working on all the arrangements - the arrangements for the fee, the level threshold for the fee to cut in.”