ABA calls for more incentives for Aussies to use savings accounts

The Australian Bankers' Association (ABA) has issued a list of proposals to the government to improve the tax system and encourage more people to use savings accounts.

It noted that there are currently tax disadvantages to using products such as high interest savings accounts, so suggested that more reforms are necessary to encourage consumers to keep putting cash aside.

"Banks would also like an exemption from interest withholding tax for non-residents with domestic retail deposit accounts and an exemption from interest withholding tax for wholesale borrowings from non-residents," the statement from the ABA said.

Steven Munchenberg, chief executive of the body, said the nation should follow international consensus when considering the general direction of tax changes in the country.

According to the ABA, the country needs reforms regarding saving and investing in order to bring Australia in line with the international trend.

Earlier this month, Seniors Australia criticised banks for the practice of moving funds from expired term deposits into low-interest savings accounts.

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