Few expect banks to absorb proposed levy

Very few Australians expect the proposed bank levy will be absorbed by the major banks, resulting in higher fees and interest rate charges.

Bill Shorten says it is clear the Turnbull government's proposed bank levy was a rushed policy. (AAP)

Only seven per cent of Australians expect the nation's major banks will absorb the Turnbull government's proposed bank levy.

The latest Essential Research poll found almost four-in-five Australians expect the levy will be passed on to bank customers through higher fees, charges or interest rates despite government pressure on them to absorb the cost.

The poll's findings come as smaller banks and lenders face a more challenging funding environment after a global credit rating agency downgraded 23 financial institutions, fearing an increased risk of a correction in house prices at a time of high indebtedness.

Shadow treasurer Chris Bowen blamed the government for failing to address rising private debt and property prices.

He says customers of smaller banks will pay the ultimate price as increased borrowing costs are passed on to mortgage interest rates.

The government again had to defend Treasury's revenue projections after the major banks calculated the cost of the levy to them would fall short of the $6.2 billion forecast over the next four years.

With the banks able to deduct the levy as a pre-tax expense, the four major banks estimate the combined after-tax cost will be just under $1 billion per year.

They estimate the split will be ANZ $240 million, Commonwealth Bank $220 million, National Australia Bank $245 million and Westpac $260 million.

Macquarie Bank, the nation's largest investment bank which is also subject to the levy, has yet to make any statement since it was announced in the May 9 budget.

Greens senator Peter Whish-Wilson, a former banker, said Macquarie would not go close to accounting for the shortfall.

Prime Minister Malcolm Turnbull insists the levy will raise $1.6 billion in its first year.

But when quizzed about the figure in parliament on Tuesday, Treasurer Scott Morrison gave his Labor counterpart an accounting exercise.

Mr Morrison explained the figure was $1.2 billion on a gross cash basis as stated in the budget, while the $1.6 billion is on a fiscal basis.

Mr Bowen questioned why the tax was being so "poorly implemented".

"There is no movement of the goalposts," Mr Morrison replied.

"All I know that the shadow treasurer is doing is running the lines of the banks."

Opposition Leader Bill Shorten, while supporting a levy on banks, said it was clear the prime minister and treasurer had rushed through the policy.