Banking disrupter Macquarie would jack up the interest rates on mortgages, cut back on deposit pricing or may even leave the retail market altogether if the Albanese government imposes a rural service levy to subsidise branch locations in the bush.

This is the view of veteran MST Marquee banking analyst Brian Johnson, who says the controversial plan for banks to cough up more in tax if their regional footprint is lacking, revealed by The Australian Financial Review, will dampen competition in the mortgage market.