The Claim
“Proposed taxing all bank deposits.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The claim contains a fundamental factual error. The bank deposit levy was not a Coalition proposal—it was originally proposed by the previous Labor government in 2013. The Coalition government actually cancelled the proposed levy in September 2015 [1][2].
According to ABC News, the bank deposit tax "was proposed, but not legislated, by the former Labor government ahead of the 2013 election" [1]. The Sydney Morning Herald confirms that "A bank deposit levy was first proposed by the former Labor government and the Coalition had already factored the revenue into its May budget" [2].
The proposed levy would have imposed a 0.05 per cent tax on all bank deposits up to $250,000, with the revenue intended to fund a Financial Stability Fund to cover costs in the unlikely event of a bank collapse [1][2]. The levy was projected to raise approximately $500 million per year ($1.5-2 billion over four years) [1][2].
On September 1, 2015, Prime Minister Tony Abbott announced: "Labor's bank deposit tax is dead. The last way to make our banks strong, the last way to protect depositors is to hit banks with more taxes" [1].
Missing Context
Critical context omitted:
Labor's proposal, not Coalition's: The claim fails to disclose that the bank deposit levy originated with the Labor government under Wayne Swan in 2013, not the Coalition [1][2].
The Coalition cancelled it: Rather than implementing the tax, the Abbott government walked away from it at a cost of $2 billion in lost revenue [2]. This was a policy reversal, not a new proposal.
Policy rationale: The levy was designed to create a Financial Stability Fund—a form of insurance to protect depositors in the event of bank failure [1]. It was not simply a revenue grab but had a specific financial stability purpose.
Backbench pressure: The decision to dump the levy came after marginal seat backbenchers expressed concerns it could "look as though the Government is following Labor's lead" and "trying to balance the books by raiding people's savings" [1].
Financial system inquiry context: Treasurer Joe Hockey cited recommendations from the financial systems inquiry, which called for lenders to be better capitalised, as making the levy unnecessary and "bad policy" [1].
Source Credibility Assessment
Original sources provided:
ABC News - Australia's publicly funded national broadcaster. Generally regarded as mainstream and reliable, with a statutory requirement for impartiality under the ABC Act. The ABC is widely considered one of Australia's most trusted news sources [1].
Australian Financial Review (AFR) - A respected financial newspaper focusing on business and economic news. Generally considered credible for financial and economic reporting, though editorial coverage may reflect business community perspectives [2].
Both sources are mainstream Australian media outlets with established reputations for factual reporting on economic and political matters. Neither is overtly partisan in the manner of advocacy organizations.
Labor Comparison
Did Labor do something similar?
Search conducted: "Labor government bank deposit levy proposal 2013"
Finding: The bank deposit levy was Labor's proposal in the first place. The previous Labor government proposed the 0.05% levy ahead of the 2013 election [1][2].
Additionally, Labor introduced the Major Bank Levy Act 2017 after returning to government, which imposed a 0.015% levy on banks with liabilities exceeding $100 billion [5]. This was a different policy targeting major banks' liabilities rather than retail deposits, but it demonstrates Labor's willingness to impose bank-specific taxes.
Tony Hockey explicitly called out Labor's inconsistency: "It is now up to Labor to declare their own deposit tax is dead. They used this simply as a way of trying to fatten up the bottom line when they were in quite desperate straits" [2].
Balanced Perspective
This claim presents a deeply misleading narrative. The Coalition did not "propose taxing all bank deposits"—it inherited a Labor proposal and subsequently cancelled it.
What actually happened:
The bank deposit levy was introduced by Labor in 2013 as part of budget measures. The Coalition, upon taking office, initially retained the revenue projections in their budget (as it was easier than finding replacement revenue). However, following consultation with stakeholders and the release of the financial systems inquiry recommendations, the Abbott government announced in September 2015 that they would not proceed with the levy [1][2].
Key context: The deposit levy was intended to fund a Financial Stability Fund, similar to systems in other countries, to ensure depositors could be protected if a bank failed. The $250,000 cap meant it would not affect wealthy depositors with larger balances—just ordinary savers [1].
Comparative analysis: The Coalition's decision to cancel the levy was welcomed by the banking sector and consumer groups who argued it would harm savers, particularly self-funded retirees [2]. However, the Greens criticised the move as caving to the big banks and blowing a "hole" in budget revenue [2].
This is not unique to the Coalition—it was Labor's policy that the Coalition rejected.
MISLEADING
2.0
out of 10
The claim "Proposed taxing all bank deposits" is factually misleading. The bank deposit levy was proposed by the Labor government in 2013, not the Coalition. The Coalition government (Abbott/Hockey) actually cancelled the proposed levy in September 2015, forfeiting $2 billion in projected revenue. The claim omits this critical context and falsely attributes the proposal to the Coalition when they were in fact the government that terminated it. The sources provided actually demonstrate the Coalition's cancellation of Labor's proposal, not the Coalition proposing a new tax.
Final Score
2.0
OUT OF 10
MISLEADING
The claim "Proposed taxing all bank deposits" is factually misleading. The bank deposit levy was proposed by the Labor government in 2013, not the Coalition. The Coalition government (Abbott/Hockey) actually cancelled the proposed levy in September 2015, forfeiting $2 billion in projected revenue. The claim omits this critical context and falsely attributes the proposal to the Coalition when they were in fact the government that terminated it. The sources provided actually demonstrate the Coalition's cancellation of Labor's proposal, not the Coalition proposing a new tax.
📚 SOURCES & CITATIONS (7)
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1
abc.net.au
The Federal Government abandons plans for a bank deposit tax which would have imposed a 0.05 per cent levy on deposits up to $250,000 from the start of next year.
Abc Net -
2
smh.com.au
The Abbott government has walked away from a plan to impose a tax on bank deposits, a proposal that was expected to deliver revenue of $500 million a year.
The Sydney Morning Herald -
3
thenewdaily.com.au
Coalition won't proceed with a bank levy proposed by former Labor Government.
Thenewdaily Com -
4
9news.com.au
The Abbott Government has dumped a Labor initiative to impose a bank deposit levy, causing a $2 billion hit...
9news Com -
5PDF
Increase to the rate of the Major Bank Levy by 10 percent
Pbo Gov • PDF Document -
6
apra.gov.au
Apra Gov
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7
guaranteescheme.gov.au
Guaranteescheme Gov
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.