Treasurer Joe Hockey has hinted the Federal Government will push ahead with a tax on bank deposits. No official announcement has been made as yet but it is believed the Australian federal govt is considering a bank deposit tax now of about 0.5 per cent for every deposit.

Mr Hockey says the Government would have to impose unpopular measures to reduce the budget deficit. “There are many things I don’t like that I have to implement at the moment that have been the legacy from six years of bad Labor government,” he said.

The Government will this morning release a discussion paper canvassing potential changes to the taxation system. Mr Hockey confirmed it will warn that Australians will have to pay ever increasing amounts of tax, unless welfare entitlements are cut. “If Labor and the Senate keep blocking reductions in government expenditure, then the only way we can live within our means is to massively increase taxes,” he said. “That is not what we want to do, so we are trying to get government expenditure down.