The proposed levy would be between 0.05 per cent and 0.1 per cent. An initial version of the AFR article had reported the levy would be between 0.5 per cent and 1 per cent. Presently, the government guarantees deposits up to $250,000 without charging the banks. Today at Parliament House, Finance Minister Penny Wong would not be drawn on reports about the levy on bank deposits. "I think the Treasurer today has referenced the fact that the IMF and the RBA have put a view to the government about the need for a fund to cover deposit protection. And the Treasurer's made clear he's consulting on that," Senator Wong told reporters. The Finance Minister said there was always "speculation" before a budget or budget update but would not comment on that before the economic statement was handed down. When asked if it would be presented on Friday, Senator Wong replied: "in the near future".

Banking stocks slumped by 2 per cent, weighing down the broader share market, in reaction to the report. By midday, Commonwealth Bank, ANZ, and NAB were all down 2 per cent by midday and Westpac was down 1.5 per cent. The ASX financials index - which accounts for about 30 per cent of the total index - was the only sector of the market that had fallen. The AFR quotes a senior source as saying the levy would build up funds “over time”, and would take several years to reach the billions. He said it would raise less than $1 billion over the forward estimates but build over the outer years. An earlier report on the website said "it is understood the revenue raised would be at least as much as the $5.3 billion that the increased tobacco excise, also to be unveiled on Friday, will raise". The revenue raised by the levy would also be added to the budget bottom line, helping the government offset a forecast plunge in revenues since the May budget and meet its target of returning to surplus in 2016-17.

“It won’t fix the surplus problem in itself but it will help,’’ the source said, according to the AFR. The banks are understood to be unhappy about the proposal and Treasurer Chris Bowen, who has been consulting the sector about the move, will meet again today with the Australian Banking Association. One big bank warned the levy would be passed on in the form of reduced interest payments on deposits, the AFR said. When asked this morning if the government would look at the banks to find more money, Mr Bowen said "we have no plans to tax banks". But he said the government was in discussions with banks about financial regulation. "Of course we’re in discussions with banks about various matters in relation to financial regulation and financial services, consulting with them about recommendations that have been made by the financial regulators and that consultation will continue," he said.

Opposition leader Tony Abbott was asked to respond to the report, but would not be drawn on the issue until the facts are known. "We will respond to the government's economic statement when we see the economic statement. We are not going to respond piecemeal to rumoured or individual items that may or may not be in it," he told reporters in Melbourne. Loading He did, however, take aim at the move to raise tobacco excise, labeling it "just another tax." "If they do this to you before the election, just think how much worse it will be after the election," he said.