The Turnbull government's proposed levy on the big five banks could lead to housing being less affordable for low-income earners, experts say.
Their analysis comes as Treasurer Scott Morrison says the government would put "tremendous pressure" on the banks to absorb the cost of the levy and Labor flagged extending the levy to foreign banks.
Two Griffith University academics, Fabrizio Carmignani and Ross Guest, say studies of European countries show bank taxes similar to the 0.06 per cent bank levy proposed in the federal budget will be largely borne by bank customers, not shareholders.
The levy could be passed on to customers by increasing loan rates, fees or both.
Professor Carmignani told AAP higher rates or fees will proportionally cost more for lower-income earners than those on higher incomes, even if it amounts to a few dollars a month extra.
"This impact on cost of a loan might be marginal, but for some individuals on bottom income levels, even a marginal impact could be the difference between getting a home loan or not," he said.
"If there is one thing we don't need in Australia, it's a regressive tax that makes inequality even worse."
He said there was also evidence in some countries where such levies had been introduced that banks engaged in more risky investments and there was a small increase in loan defaulting.
"This is not just a cash-raising exercise ... We also must acknowledge the economics of this are quite complex and might lead to unintended consequences."
Former Treasury boss Ken Henry and ex-treasurer Peter Costello have said banks are likely to pass on the cost.
Mr Morrison said the Australian Competition and Consumer Commission would monitor the banks "very closely" through a special unit.
"The best form of protection is competition and ... regional banks, they're not touched by the bank levy at all and so if people don't like what the banks do and if the banks choose to reinforce the worst perceptions that people have of them and do that, I'd suggest they look at another bank," he told ABC radio on Wednesday.
"But we'll be keeping the pressure on them."
He said when the UK introduced a similar levy, the banks absorbed it.
"They just got it, absorbed it and moved on," he told NSW south coast radio station 2ST.
Labor supports the $6.2 billion levy on liabilities over four years but also the banks' push for an open inquiry into its implementation.
Shadow treasurer Chris Bowen said Labor's bank levy had been put in place with proper consultation, in contrast with the coalition's levy, which was "plonked into the budget at the last minute".
He told the National Press Club the opposition would not "pick a fight" over the levy but was open to discussion about expanding it to foreign banks.
"If the government says it is about competition, why are big foreign banks exempt that are operating in Australia, that are competing with Australian banks? It could be called reverse protectionism," Mr Bowen said.
© AAP 2017