ACTU: Banks Risk Community Anger
ACTU: Banks Risk Community Anger
The big banks are behaving irresponsibly by using the latest cut to
official interest rates to line their pockets and bolster their bottom
line, rather than helping relieve the financial pressure for working
families, unions say.
ACTU President Sharan Burrow said the refusal of the
banks to pass on the rate cut would fuel community anger that will lead
to calls for further regulation.
She said the explanations being given by the four big
banks for their failure to pass on the full cut to the official cash
rate were inadequate and self-serving.
Their actions were even more disappointing as they come
just days after the banks recently agreed to provide mortgage relief to
homeowners made jobless.
"Passing on yesterday's 0.25 of a percentage point cut
by the Reserve Bank would make a real difference to working families,"
Ms Burrow said. "It would shave about $45 off the cost of an average
$300,000 mortgage.
"Relative to the rest of the world, the Australian banking system remains stable, highly profitable and resilient.
"The
big four banks have entrenched their market dominance in recent months,
but when it comes to how they treat their customers they are carrying
on as if the economic downturn never happened. They need to get with
the program and realise that the party is over.
"Working families are saying they are sick of the greed of the big banks and that enough is enough.
"The
banks have been the recipients of massive taxpayer support including
deposit and wholesale funding guarantees to help steer them through the
Global Financial Crisis.
"Yet they have continued as if it was business as usual by shedding jobs.
"Now
they are acting irresponsibly by refusing to pass on the latest cut to
the cash rate onto struggling homebuyers, small businesses and
consumers.
In the past 12 months, the official cash rate has fallen
by 4.25 percentage points to a 48-year low of 3%, but in the same
period the standard variable lending rate has only fallen by 3.5
percentage points.
"That is an extra $125 a month in average home repayment
savings that the banks have pocketed. And let's not forget that the
banks are still making billions of dollars from fees.
"This will only increase community sentiment for greater
regulation of banks and of banking executives' remuneration," Ms Burrow
said.
Ms Burrow said the banks should also make it easier for
families to opt out of fixed home loans that were set at much higher
rates.
The fees of more than $20,000 being charged to switch loans were exorbitant, she said.