The South Australian opposition will seek to block the state government's controversial new bank tax in a move Treasurer Tom Koutsantonis has labelled a "shameful capitulation".
Mr Koutsatonis says he still expects the bank levy to pass the parliament despite a vow by the opposition to vote the measure down with support from key crossbench MPs.
He says Opposition Leader Steven Marshall has changed his view after initially indicating he would pass the budget initiative and has decided to take the side of the banks rather than ordinary South Australians.
"It's unprecedented in its capitulation. One meeting with one bank and he backflips," the treasurer said.
But Mr Marshall said the government's levy was "toxic" and the opposition had decided to "draw a line in the sand".
"The Liberal Party has made a decision. We will block this tax, this toxic tax on jobs here in South Australia," he told reporters on Monday.
"Labor has been a wrecking ball through the South Australian economy over an extended period of time and we are now drawing a line in the sand."
The Liberals will first seek to amend the government's budget measure in the lower house and if that proves unsuccessful will use their numbers in the upper house, along with key independents, to block it entirely.
Among them are two MPs from the Australian Conservatives who have welcomed the opposition's decision.
Robert Brokenshire said the tax was never going to be good for business, families, farmers, retirees or people looking to invest in SA.
"This budget measure was nothing but a lazy money grab by a tired government who after nearly 16 years cannot find innovative ways to grow our state," Mr Brokenshire said.
The opposition's decision to vote against the tax came at a partyroom meeting as a poll revealed South Australians think they would be forced to pay for the new measure.
The Australian Bankers Association-commissioned Galaxy poll surveyed voters in eight marginal seats and found nearly 80 per cent believed the tax would be a tax on everyone and most want it blocked in parliament.
The state government announced the tax as part of this year's budget to raise $370 million over four years from ANZ, Westpac, Commonwealth, NAB and Macquarie banks based on their liabilities across the country.
A similar federal government bank levy aims to generate $6.2 billion from the same institutions to help repair the budget.
