Tax breaks urged for savings account holders

Bankers are urging Australian treasurer Wayne Swan to offer new tax break incentives to hardworking Aussie savers.

They claim that offering tax breaks on savings accounts would bolster banks' balance sheets and ensure that they can lend more money to businesses – driving the economic recovery in Australia.

Speaking to the Australian, National Australia Bank chairman Michael Chaney said that Mr Swan's tough rhetoric about profiteering in the banking sector is "very dangerous".

He claimed that Australia could end up in a downward economic spiral if profitability at the big lenders was squeezed even further.

Experts at Suncorp Bank, Westpac and ANZ have all claimed that tax breaks on savings accounts would help financial institutions move away from foreign markets as a means of raising capital.

However, other factors are affecting the amount of money that Australians are putting into their savings accounts – including the wider economic turmoil being felt in the country.

According to the Australian Bureau of Statistics, the cost have living has risen dramatically in the past 12 months.

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