‘Not a Crisis, but an Economic Transition’: Australia to Impose Levy on Bank Deposits
August 2nd, 2013Via: BBC:
Australia has unveiled a levy on some bank deposits to raise money towards a fund aimed at safeguarding against a banking collapse.
Deposits up to A$250,000 will have to pay a levy of 0.05% from January 2016.
It will be imposed on banks and not account holders. But banks have warned costs may be passed on to customers.
The move comes as the government warned of slower economic growth and a much bigger budget deficit than it had previously forecast.
Australia’s economic growth over the past few years has been powered mainly by the success of its resources sector.
Demand from countries such as China resulted in a commodities boom – which helped sustain the country’s growth through the global financial crisis.
However, growth in those economies has slowed recently, driving down demand for commodities as well as their prices.
That has not only affected Australia’s economic growth but also hurt the government’s tax revenues.
On Friday, the government lowered its growth forecast. It now expects the economy to grow by 2.5% in the current financial year, down from its previous projection of 2.75%.
It warned that slowing economic growth was likely to result in a rise in unemployment.
“Australia is undergoing an economic transition. Not a crisis, but an economic transition that needs careful economic management,” Mr Bowen said.
“This transition has been brought about by the China mining investment boom coming to an end.”
He added that as expansion in the mining sector slows, “non-mining sectors of the economy will need to lead growth in future”.
Thats one way to cause capital flight…
Ready the mattresses! I see a bank run in the future…