The Rudd government acted in line with anxious public sentiment and according to the dark mood of the moment when it introduced its bank deposit guarantee last October. The Australian economy today is still an apprehensive, but less panicked, place. Our big four banks — often we are told the robust, stable envy of the financial world — have confessed declining profits to the market but otherwise appear to be in vigorous, if not rude, health.

Some even talk of expansion; all have increased the margins they extract from lending money to ordinary Australians … the same ordinary Australians whose taxes stand at the ready to support any bank that becomes the sudden victim of its past adventurism, or a sudden flood of dumb bad luck. One of the big four even managed to raise a quick $1billion this week without the benefit of the guarantee, the third bank to raise substantial funds outside of the guarantee framework. They don’t need it anymore.

Next week’s Federal Budget presents a rich variety of invidious choices and awkward imperatives, but among them should be setting a sunset date on the bank guarantee. The moment of worst danger has passed. The banks are growing stronger and extracting an every increasing return for every dollar they lend. They no longer need taxpayer money at their back.