Burden of bank levy to fall mainly on customers

In his latest article for The Australian – “Households will Bear Banks’ Burden” – Paul Kerin argues that the costs of the bank levy announced by the Treasurer in last week’s federal budget will be borne largely by customers, contrary to claims otherwise. Evidence from similar levies introduced in European Union member countries show that a considerable proportion of levy costs were passed through to borrowers. Regardless of who bears the burden, a bank levy is considered a “good” tax to the extent it incentivises banks to reduce risk and therefore avoid future taxpayer-funded bailouts. A copy of the article is also available for download here.

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