How to avoid the big banks’ levy hike

Well, Starts at 60 readers, you called it when you said the ‘major bank levy’ would be passed down to customers.

Tuesday’s budget reveal that the Big Four, plus Macquarie Bank would have to pay 0.06 per cent or $6.2 billion in the next four years had SAS followers up in arms as to who would actually foot the bill.

Reader Neil Morrison said on Facebook: “Banks will find a way to get it back from the consumer, they are the greatest parasites on earth.”

Margaret Bonacina commented: “The banks whine but will still make their huge profits as we mere mortals pay the new tax with higher fees, etc. Banks won’t lose a cent of their profits.”

And Maree Clark wrote: “It will be the bank customers that cry me a river!” in response to Treasurer Scott Morrison’s comment that banks could “cry me a river” if they were unhappy about the tax.

Even the banks have admitted the levy would ultimately be passed down to consumers and shareholders.

“There is no ‘magic pudding’,” Westpac Group chief executive Brian Hartzer said.

“The cost of any new tax is ultimately borne by shareholders, borrowers, depositors and employees.”

Hartzer said the new tax was a hit on the retirement savings of millions of Australians and bank customers.

NAB chief executive Andrew Thorburn echoed his sentiments and said: “A tax cannot be absorbed. This tax is borne by these people. It is not possible to impose a tax without an impact on people, and therefore the wider community.”

Now CHOICE is urging Australians to find a better deal.

“If you are with one of the big five banks and they punish you by passing on the levy, your best option is to ditch them for one of the 135 other deposit taking institutions in Australia,” CHOICE CEO Alan Kirkland said.

“One challenge for consumers looking to switch is making sure that you aren’t with a sub-brand or product still connected with a big bank…you could be with a big institution and not even realise it.”

CHOICE put together a handy cheat sheet for people who want to break ties with the big banks:

Read more: Treasury targets big banks with $6B levy

Will you consider breaking ties with the big banks?