The Federal Budget proposes to raise $6.2m over four years through a new levy on banks.
“This new levy should not be pushed onto bank customers,” said Gerard Brody, CEO of Consumer Action Law Centre. “There is a real risk that banks will just increase fees or home loan interest rates to cover the levy.”
As part of the new levy, additional funding has been set aside for the Australian Competition and Consumer Commission (ACCC) to conduct a mortgage pricing inquiry over the next year.
“To be effective, the ACCC must be empowered to prevent price exploitation so the banks don’t just use this levy as another reason to charge customers.”
Mr Brody said that the levy should be used to fund a redress scheme for those that have lost money in banking scandals.
“The levy should be used to compensate those who lose money from financial advice or other misconduct but haven’t received compensation because the business has gone insolvent. This would provide justice for those individuals and families ripped off.
“In some cases, where compensation isn’t paid, people can be left in financial despair or even at risk of homelessness. This is the opportunity to prevent this happening in the future”.