More than two decades of dithering over the merit of funding a deposit insurance scheme in Australia looks to be over, with the Federal Government set to outline today what this insurance will cost banks.The Australian Financial Review reported on its website yesterday that a deposit levy will be included as part of an economic statement to be made today.Finance minister Penny Wong confirmed the Government had received advice from financial regulators supporting a levy.Industry talk yesterday was that the levy will be a flat 0.05 percentage points on insured deposits, with a starting date for the scheme of January 2016. At present, under the Financial Claims Scheme, the government guarantees deposits of up to A$250,000 at no charge to banks or depositors.Between 2008 and 2012, larger deposits could be insured for a voluntary fee of 0.7 percentage points for deposits with a large bank, and 1.5 percentage points for deposits with small banks.The present motive for introducing the levy appears to be budgetary, with the levy to be paid being counted as consolidated revenue under public sector accounting standards.Even so, the Government is thought to be planning to have the levy paid into a dedicated fund, which is a common model offshore. It is not yet clear what governance arrangements are contemplated for the fund.The Council of Financial Regulators has previously considered the introduction of an explicit deposit insurance levy on banks, building societies and credit unions.In the past, regulators canvassed a range of scenarios, with the annual fee ranging from two to 23 basis points of insured deposits.One scenario that recurs in documents released in 2012 is how to achieve an insurance fund size equal to 0.5 per cent of covered deposits. A fee of 10 basis points would reach the target within six years and a fee of 20 bps would reach the target within three years. A fee of 23 bps would take 10 years to generate a fund equal to two per cent of covered deposits.On the other hand, even a large fee combined with a high level of insured deposits would not be enough to generate sufficient funds to meet claims from a large bank were one to fail. That event would still require a parliamentary appropriation, one 2011 study concluded.