Remember that phone call? You know, the one from the bank manager about a decade ago.

"Hi, I know things have been tough out there for a while so I was just calling to let you know that we've decided to help you out with fee insurance and cut price rates.

"And listen, if you get into strife, you know, like lose your job or something and can't repay your mortgage, we'll pick up the tab for as long as you need until you get back on your feet."

Sound implausible? Let's face it, no commercial operation, and especially not an Australian bank, would ever even consider extending such generosity.

This may come as a surprise, but that's exactly what you've been offering the five major banks for the past decade.

Your taxes subsidise the banks

Australian taxpayers have been subsidising our five major banks since 2008 with government guarantees over bank deposits and a cheap $180 billon debt facility that has put them at a competitive advantage and boosted their earnings.

Sorry, this video has expired Anna Bligh slams bank levy 'bad policy'

On top of that, there is the legacy of the $120 billion bail-out the Federal Government dished out to the major banks, including Macquarie, by way of a taxpayer guarantee over all new debt, at the height of the financial crisis.

It was an unprecedented move that changed the nature of the relationship between the Commonwealth and the financial sector and one that would never be extended to any other industry.

The guarantee lasted two years, but forever tied our banks to the Commonwealth. As a result, global ratings agencies now consider our banks government-backed.

They enjoy stronger credit ratings than they otherwise deserve, which delivers them a competitive advantage because they can borrow offshore at a discount.

That boosts their profits. And guess what those extra earnings do? They turbo-charge executive salaries and bonuses, which has helped make Australian bankers the highest-paid employees in the land. All courtesy of the taxpayer.

So, despite the confected outrage from the financial sector and what passes for business news in other areas of the media, all that the Treasurer Scott Morrison has done by imposing a levy on the banks is to charge them a fee for providing insurance services.

Banks: We charge fees, we don't pay them

This shouldn't come as a shock to an industry that for years has enriched itself by gouging its own customers through overcharging on a mass scale, rigging markets and failing to deliver appropriate advice and insurance services. But it has, judging by the white-hot anger among senior bankers.

You could argue that the banks have escaped relatively unscathed. For a start, they haven't been slugged with a bill for the past decade of outstanding fees.

Then there is the oligopoly or cartel-like behaviour of the major banks, which, between them, control about 80 per cent of the Australian mortgage market, the engine for their world-beating returns.

For years now, they've managed between them to simply pass on all costs including the cost of extra regulation. That's why they've all managed to produce an almost endless string of record profits in the aftermath of the financial crisis.

And that's why now, they are threatening to simply pass on the added costs of the new levy.

It's what economists refer to as a "cost plus" model. And it's a model only available to firms with an undue amount of market power, either through a monopoly or an oligopoly.

In a truly competitive market, firms have to compete on price, not merely pass on costs.

That level of market power also explains their retreat from overseas. ANZ and NAB are the latest to quit Asia, Europe and North America.

The kind of easy pickings at home just aren't available elsewhere. No Australian retail bank, it seems, has ever successfully expanded beyond Auckland.

How the banks were saved

The accepted version of events since the financial crisis, among the banking fraternity is one of Australian exceptionalism, that our financial system sailed through the crisis unscathed.

It's a total fantasy. The fact is that each of the big five, and Macquarie particularly, were horribly exposed.

When global credit markets froze, all of them faced implosion. They all had billions borrowed on short-term credit markets that they couldn't refinance or roll over.

Led by Macquarie, they begged for assistance and it duly arrived.

First up, short-selling in all financial stocks was banned in an attempt to arrest collapsing share prices.

A controversial decision in itself, that protection was not extended to any other firm in any other industry as short-sellers continued to trade miners, manufacturers and everything else.

Shortly afterwards, the taxpayer-funded bail-out was delivered, which saved our bankers' bacon.

Whenever that is mentioned now, our bankers often retort that they repaid the money to the Commonwealth and, wait for it, that they had to pay a fee. Quelle horreur!

In fact, our financial institutions paid a $5 billion fee over the life of the loans which, for $122.69 billion over many years, is a cut-rate deal in anyone's language.

Banks take the profits, you cover the loss

While the guarantee over new offshore loans was wound back in 2010, taxpayers continue to guarantee customer bank deposits up to $250,000. That comes free of charge.

On top of that, there is a cut-rate "Committed Liquidity Facility" for up to $180 billion. Both Treasury and the Reserve Bank have argued that banks should pay 0.05 per cent annually just for the deposits guarantee.

Given Mr Morrison's proposal is for a 0.06 per cent fee, it would appear they have been let off lightly.

Ever since Tuesday's budget, various free market think tanks have been on the attack, arguing the Government has abandoned free market principles with the new impost and that this is a step towards nationalisation.

Nothing could be further from the truth. The banks abandoned the free market in 2008 when they begged for taxpayer assistance and in the intervening years have trampled over the interests of their own customers and the community.

Since then they have adopted the old agrarian socialist mantra: capitalise your profits and socialise your losses.

If there was one failing in last week's budget by Prime Minister Malcolm Turnbull and the Treasurer, it was to allow the banking sector to portray the new levy as some kind of unexpected impost, a shocking intrusion into the free market, rather than what it really is: a commercial fee for services rendered.