Treasurer Scott Morrison said the lenders could afford to pay, and the cash would help with budget fix and a raft of spending on infrastructure, health and schools.
Both Labor and the Greens have applauded the government's move to tax the big banks 6.2 billion AU dollars over the next four years, but CEO of the Australian Bankers' Association Anna Bligh said the levy would trickle down to affect everyday Australians.
Investors were already wary of the banks and the news, combined with slightly soft trading update from the Commonwealth Bank of Australia, deepened a sell-off that began on May 2 and has now sliced A$30 billion from the capitalisation of the banks.
The budget was the first since the government was re-elected on a tiny majority previous year.
"There are no silver bullets to make housing more affordable", Mr Morrison said.
From 1 July 2017, the government will impose a quarterly 0.015 per cent levy on an ADI's licensed entity liabilities, provided that the ADI has liabilities of at least $100 billion.
"If they do, take your money somewhere else, take your money to a regional or smaller bank", he said.
He praised the focus on shared whole-of-government platforms, the attempt to break down some of the data silos that plague governments around the world through the "Tell Us Once" style of system, and the federated identity management framework as good steps towards digital government maturity by the Australian Government.
Political analyst Laurie Oakes, who has covered 48 federal budgets for the Nine Network, said the budget could have been handed down by a Labor government, but said it "does what the government needs to do" to "lift it out of the electoral doldrums". "The challenge will come in the execution".
Lacheca added that funding to train public sector employees in digital skills is another good step.
"We were pleased to see the investments in the Cyber Security Advisory Office, backing of our fintech sector, and the commitment to improving student outcomes", Anthony Wong, head of the country's peak ICT body, the Australian Computer Society, said. We are rising to the challenge and ensuring it is funded.
The Treasurer has introduced a new federal body called the Australian Financial Complaints Authority, which he described as a "one stop shop" for customer complaints.
Council of Small Business Australia (COSBOA) chief executive Peter Strong says commitments to infrastructure spending and red tape reduction can only help small businesses conditions, and overall, he thinks the budget has a lot to offer SMEs.
The government said existing training benchmarks have not been successful in generating training opportunities to allow Australians to fill skill gaps. "These are smart investments that will enable the adoption of future technologies as government services evolve".
"The key will be how well this is executed".
The government expects growth will increase from 1.75 percent in the current fiscal year to 2.75 percent next year.