A new political party has proposed a "gouging tax" to take on bank profits.
The Bank Reform Party has announced details of what it says will be its centrepiece policy. The proposed "gouging tax" would hit banks if they fail to pass on rate cuts in line with easing funding costs.
The BRP has said it will set up an independent panel to review funding costs, revenue and margins to determine if banks were being "honest" in their assessment of mortgage rates.
"The Big Four, and their subsidiaries, hoovered $3.7bn out of Australian's pockets last year on mortgages alone by gouging on the RBA
cash rate while citing funding costs as justification," BRP leader and NSW Senate candidate Adrian Bradley said.
Bradley claimed that bank funding costs were falling, but that banks "continue to hide behind them while hurting mortgage holders and small businesses".
Bradley claimed the proposed tax would vary from the levy put forward by the Greens. He said the levy would put additional pressure on banks to hike rates in order to shore up profits.
"The Greens' levy proposal is a green light for banks to continue gouging, whereas the BRP proposal is a speed camera," Bradley said.
The BRP also proposed that money raised from the "gouging tax" go to fund a "People's Bank" and financial literacy programs.