Seniors have a blunt message for the federal government: leave savers alone.
Over-50s lobby group National Seniors Australia has joined the opposition to a bank deposits tax, saying people who save are an easy target for governments.
“They’re low hanging fruit for governments who are keen to grab money,” chief executive Michael O’Neill told AAP.
The tax – a 0.05 per cent levy on deposits up to $250,000 first proposed by Labor – is expected to be unveiled in the May 12 budget in a move that would raise about $500 million a year.
The Australian Bankers Association has said the tax would punish savers and self-funded retirees already struggling with low interest rates.
Mr O’Neill says it doesn’t make sense to tax people who save money when all the commentary is about drawing down debt for the nation.
“Of course at a time when term deposits are paying three-fifths to five-eighths of stuff all, that just all the more reinforces the negativity about that.”
He said the deposit tax issue was similar to Labor reducing the period bank accounts and life insurance policies can be inactive before they are transferred to the government to three years from seven years.
That increased the amount transferred to ASIC as unclaimed money from about $70 million in 2011/12 to $550 million in 2012/13.
Seniors welcomed the coalition government’s announcement last month that it was restoring the time period back to seven years, but Mr O’Neill said that had now been tempered by the talk of a deposits tax.
“That was all about reducing the deficit, for no good reason beyond that, and this savings tax is of a similar nature.
“Leave savers alone.”