PM calls for banks to pass on cut
PRIME Minister Julia Gillard has joined the chorus of people calling on the country's biggest banks to pass on all of the Reserve Bank's interest rate cut.
As of Wednesday afternoon only the Bank of Queensland had cut its variable home and business loans rates, albeit five points less than the RBA's 25 basis points cut announced on Tuesday.
Speaking in Tasmania, Ms Gillard echoed the sentiments of Treasurer Wayne Swan and others as the pressure mounted on the banks to pass on in full the RBA's surprise cash rate cut.
"I want to see Australian families get the benefits," Ms Gillard said.
"For a family, mortgage typical size, say $300,000, they are $4500 better off as a result of the interest rate reductions that have happened during the time of this government since its election in 2007.
"That makes a difference to families. It makes a difference to their cost of living pressures and their abilities to make ends meet, so I do want to see interest rate reductions passed on."
Assistant Treasurer David Bradbury was also out putting the case.
Mr Bradbury said customers were expecting the banks to follow the RBA's lead.
"I think if you go and have a look at what the Reserve Bank Governor had to say in his statement yesterday, there's very strong evidence there that suggests all of the factors previously been held up as the reasons why banks were not in a position to pass on the full rate cut are no longer there," Mr Bradbury told ABC radio on Wednesday.
"If you have a look, there in black and white, the Reserve Bank Governor makes the point that conditions for Australian banks have been such that they have not had difficulty accessing funding. Now, it's been the question of access to funding that has been the principal reason used in the past.
"I think that there is no justification for withholding any of the 25 basis points, the full rate should be passed on and of course we've done a whole series of things to make it easier for consumers to pack up their bags and to take their business down the road where a better deal is being offered by another institution and I encourage them to do that."
Each of the big four banks would only say interest rates were under review.