Australia slaps new levy on major banks; boosts funding for regulator

The government has announced a number of measures over the past year to protect consumers and boost transparency in the banking sector, including beefing up the corporate watchdog's powers.

Mr Turnbull said it was only fair the "most profitable banks in the world" were levied to help balance the nation's budget and similar measures were in place around the world.

"If a family or an individual had a roof over their head that they can rely on, then all of life's other challenges become more manageable", Treasurer Scott Morrison said during his Budget speech.

"If in breach, they can be deregistered and disqualified from holding executive positions, and be stripped of their significant bonuses", the Treasurer said.

Seeking to unlock housing stock, the government is also encouraging older people to downsize by giving tax breaks if they funnel proceeds from selling their home into their pension funds.

If the government did introduce and use powers that influenced bank lending and pricing decisions they "would be effectively reduced to sales and marketing conduits, operating within centrally mandated and clearly defined boundaries", he said.

A new levy on Australia's five largest banks was expected to raise about AU$1.5 billion ($1.1 billion) a year.

As part of the budget, Canberra said banks could face penalties of up to Aus$200 million if their staff were caught ripping off customers, while regulators were handed more money to better police them.

Our recent Flash Forum participants all said that increasing supply was the most important factor in alleviating housing affordability concerns, though this needed to be balanced by measures to tackle demand, and was largely state government driven.

The Government will launch a "one-stop shop" where Australians can take their complaints about the financial sector called the Australian Financial Complaints Authority. But the budget forecast a A$7.4 billion surplus in 2020/21, an improvement on A$1.08 billion at the mid-year review.

The Australian government's 10-year nation-building program is set to create tens of thousands of jobs just as a boom in apartment construction slows and as the end of a mining investment bonanza continues to weigh on growth.

To pay for it, the government will crack down on multinational tax avoidance, bring in extra revenue from tobacco and cut funding to universities.

Students will have to shoulder a greater share of the cost of their degrees and start paying back loans at a lower income threshold. The A$1.2 billion raised over four years will fund training for Australian workers.

A $1.2 billion skills fund to provide new apprenticeships will be paid for by a foreign worker levy.

"There are no silver bullets to make housing more affordable", Mr Morrison said.

The First Home Super Saver Scheme will allow entry-level buyers to save funds at a discounted tax rate by making additional contributions to their superannuation. First home buyers will only be able to sacrifice a salary to the maximum of $15,000 per year, and they'll have to take it out once it gets to $30,000.

UNSW professor of economics Richard Holden said the move would cost the government $250 million and "do nothing to help first home owners".

Western Sydney airport will get $5.3 billion over the next ten years. That will include a potential buy-out of the Snowy Hydro scheme from Victoria and NSW, and a $20 billion "once in a generation" rail line upgrade.