Prime Minister Tony Abbott says the upcoming budget will contain some tough measures with one tipped to be a tax on bank deposits which will raise about $500 million a year.
That's not confirmed but Labor said it appeared the government was again breaking their promise of no new taxes.
The Australian Financial Review reported on Saturday the government would go ahead with the bank deposits insurance levy, initially proposed by Labor in 2013, to raise revenue and as an alternative to requiring banks to hold extra capital as insurance against collapse.
Under Labor, this was set at 0.05 per cent on deposits up to $250,000, starting in 2016.
It was calculated to raise $733 million in the first 18-months of operation with the revenue to go into a Financial Stability Fund.
In opposition, the coalition didn't like the idea but then adopted it in government, referring it to the Financial System Inquiry which suggested a different scheme.
The AFR said banks were gearing up to fight the move, saying they would pass on costs to customers, further reducing already low interest rates on deposits.
Shadow assistant treasurer Andrew Leigh said this was the fifth time the government had broken its promise not to introduce new taxes.
He said when Labor proposed such a measure, then shadow treasurer Joe Hockey described it as a "smash and grab" on the savings of Australians households.
"Now he's turning around and saying that he wants to put in place a bank tax. Labor will respond when we actually have a carefully thought-out proposal,"he said.
Addressing the Victorian Liberal Party state council in Melbourne, Mr Abbott said the government would continue the task of budget repair.
"This year's Budget will be responsible, it will be measured, but it will above all be fair and, yes, there will be tough decisions.... as there must be," he said.
"But there will be good news in this year's Budget, good news for families, with better and more affordable childcare and good news for small business in particular which deserves a tax cut."
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