The Treasurer and the PM reportedly met with the execs of the big banks last night to hammer things out, days after the RBA Governor warned that "we have been going around and around on this stuff but I think we need get something out to the markets soon".
The Treasurer has held open the possibility that millionaires will be able to opt out of the proposed new tax on big bank deposits.
After telling parliament on Tuesday that the fee to be charged on accounts worth more than $1 million would "be paid by all depositors in the deposit-taking institutions" he said yesterday that he was considering allowing big depositors to opt out.
"We have been consulting widely on this question and continuing a series of consultations through today and tomorrow on all of these matters," Mr Swan told parliament.
"As for the details, which have been the subject of some comment - the level above which large deposits will be treated as wholesale funding, how much the fee will be, how a fee will be structured, whether it would be flat, whether it would it be tiered, who would pay and whether it was compulsory or opt in - all those things have been on the agenda."...
He made the concession after being asked in Question Time how the fee would affect a depositor who had relying on the government's assurance that bank deposits would be guaranteed and locked in their money for a 12-month term.
When the Prime Minister announced that the government would guarantee bank deposits on October 12 he made no mention of big depositors being charged a fee.
Appearing before a Senate estimates committee the head of the Australian Prudential Regulation Authority John Laker said the announcement prompted big withdrawals from foreign-owned bank branches not covered by the scheme.
"But that was an initial reaction and I think the most recent advice I've got is that that situation is on hold pending the announcement of the details of the guarantee,'' Dr Laker told the committee.
The Shadow Treasurer Julie Bishop said the uncertainty was creating "massive confusion".
"Billions of dollars has moved from the foreign bank branches into the banks included in the guarantee," she said.
"Now I've been contacted by asset managers who say they want to take money out of the banks because they don't want to attract a fee which would be passed on to their deposit holders. They want to take the money out of the bank.Is that an intended consequence, to take money out of the banks, was that an intended consequence of the announcement of a new tax?''