News National Deficit ‘is all Labor’s fault’

Deficit ‘is all Labor’s fault’

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Treasurer Joe Hockey has hinted the Federal Government will push ahead with a tax on bank deposits while blaming the Labor government for the budget deficit.

When asked on Network Ten’s The Bolt Report whether he would be introducing a bank deposit tax, Mr Hockey hinted he would introduce the tax first introduced by Labor in 2013.

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Assistant Treasurer Josh Frydenberg has previously refused to provide any details on the policy, but Mr Hockey has confirmed the policy will mirror Labor’s.

“Any announcements or decisions around this proposed policy which we discussed at the last election will be made in the lead up or on budget night,” he said.

The Bolt Report host, Andrew Bolt, asked the Treasurer if he could confirm any details of the policy, expected to be introduced in the May budget.

“You can’t guarantee the trajectory of our debt will be altered by the next budget; all we know so far is that you’re considering a bank deposit tax now of about 0.5 per cent for every deposit — I mean, another tax,” Bolt said.

Mr Hockey responded by saying the Government would have to impose unpopular measures to reduce the budget deficit.

“There [are] many things I don’t like that I have to implement at the moment that have been the legacy from six years of bad Labor government,” he said.

“Let’s just go back to — this was announced by Chris Bowen. So, it is Chris Bowen’s tax. And it was announced — he said — on the recommendation of all the regulators and it’s five basis points on deposits, and it’s meant to pay for a potential bank failure and, as a trade-off, Australians with up to $250,000 in their bank accounts have a government guarantee.

“Now, what happened was, he decided to collect the money before a bank failure. Previously, the policy has been that you would impose a levy to recoup money after a bank failure.”

Mr Hockey said the Abbott Government was still committed to delivering a budget surplus but was being constrained by locked in expenditure and the Senate.

“Well, we want to do it faster but we are constrained by the fact that we cannot get legislation in some areas – not all areas, but some areas – through the Senate,” he said.