CANBERRA, Australia (9/13/11)--Australia's government has extended the time its deposit guarantee covers credit union and bank deposits up to $1 million by four months--to February, at which time a new permanent cap of $250,000 (US$288,000) per person per financial institution will take effect. The $1 million cap, which Australia's government introduced as an emergency measure to help smaller financial institutions weather the global financial crisis that hit three years ago, had been set to expire in October (The Age Sept. 12). It had been under review since May. Treasurer Wayne Swan noted that even at the new cap, the plan still would protect savings held in 99% of deposit accounts in Australian-licensed credit unions, banks and building societies, and it would protect 82% of the value of those deposits. A cap of $100,000 would not be unusually low and would cover 97% of accounts by number and 65% by value, said a Treasury paper released in May. Australia's deposit cap is less than the U.S. deposit insurance limit, but more than double programs in Japan and Canada. The change also will provide longer protection for existing term deposits, which will be protected at the $1 million level until Dec. 31, 2012. After that, the $250,000 cap will apply. The new plan will not apply to deposits sitting in branches of Australia financial institutions overseas but will apply to deposits held by foreign banks that hold an Australia-based banking license.