Australia's Big Four banks look to cut costs as challenges rise

Posted May 10, 2017

It will be hard for Labor to argue against one of the biggest imposts in the budget - an $8.2 billion rise in the Medicare levy to fund the National Disability Insurance Scheme.

Treasurer Scott Morrison will hit the airwaves on Wednesday, a day after delivering his second budget which he said was focused on "fairness, security and opportunity".

A further tax office crackdown on multinationals is set to reap $4 billion this year, with other tax measures - including allowing fewer deductions for negative gearers - to boost revenue by $2.1 billion over four years.

A rise in the department's overall public servant head count will come as it cuts $304.1 million of spending over the next four years largely by reducing its use of contractors and consultants, and clamping down on travel costs.

"This represents an additional and fair contribution from our major banks, is similar to measures imposed in other advanced countries, and will even up the playing field for smaller banks", Mr Morrison said.

Mr Turnbull acknowledged the increase was a new tax for families, but said it was needed to ensure the future of the NDIS. While upping the Medicare levy might not be popular among voters, there's few punters crying for the banks or foreign investors.

The Department of Prime Minister and Cabinet has similarly tasked Data61 with building "world-leading" data infrastructure past year, with the organisation in March announcing that it was looking to make government data more accessible to all Australians including by revamping and, and working on the creation of government dashboards.

And in recognition of the pounding on health policy it received at the election previous year, it wants to legislate a Medicare Guarantee Bill with a Medicare Guaranteed Fund to cover all expenses of the scheme.

As announced in the lead up to the budget, schools will get an extra $18.6 billion over ten years.

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That amounts to $2.2 billion over the next four years.

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. "Taxpayers, including those who have never attended university, will still fund the majority of university fees and costs - around 54 per cent of the cost on average, as well as significantly subsidising the student loan scheme", he said.

Foreign workers were also hit, with a $1.2 billion levy on their employers to fund training for local workers.

First home buyers, downsizers and renters can expect some help from the 2017 budget.

Treasurer Morrison gave more ammunition to the banking regulator - Australian Prudential Regulation Authority (APRA) - to penalise banks and senior executives for misconduct.

As for the levy on banks: "We're not going to stand in the way of it".

Morrison announced a number of demand-side measures created to improve housing affordability.

The government has foreshadowed extra spending on health and education, tax breaks for first home buyers, infrastructure investment and more money for defense and national security.

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