Australian bank share prices will be under scrutiny today after the federal government unveiled a surprise A$6.2 billion ($6.6b) levy on Australia's biggest financial institutions in a move that sparked fury in the industry.
Australian Treasurer Scott Morrison introduced the levy on Australia's five biggest banks - Westpac, ANZ, Commonwealth, National Australia Bank and Macquarie Group - in yesterday's budget, saying it was a "fair contribution" that would help competition and budget repair.
Speculation about a new impost on the big banks sparked a rout in banking stocks on the ASX on Tuesday, wiping a collective A$14b from their market value.
Shares for the big four banks fell by between 2.1 and 3.6 per cent.
Australian Bankers' Association chief executive Anna Bligh slammed the new measures, which she said were introduced without consulting the industry.
"This new tax is not a well thought out policy response to a public interest issue, it is a political tax grab to cover a budget black hole," Ms Bligh said.
Under the new measures, banks with liabilities of more than A$100b will be slugged 0.06 per cent on those liabilities each year from July 1.