Wayne has this nagging feeling of deja-vu
Photo © 2012 AAP One/Alan Porritt
Treasurer Wayne Swan has once again urged banks to pass on the full interest rate cut the Reserve Bank of Australia (RBA) made on Tuesday.
Also taking a cut is our level of interest in what Swan has to say at these press conferences.
After all, we all realised long ago that it doesn’t matter what the government says, the banks will do whatever they want.
The RBA announced it would cut the cash rate by a quarter of a percentage point to 3.25 per cent in response to a weakening outlook for global economic growth.
Mr Swan said on Wednesday many of the retail banks "have form" in not passing on full cuts but families and small businesses with mortgages deserved the cut.
"I think we'll see a variety of responses from a variety of financial institutions," he told ABC radio.
"From my point of view, the banks should not keep some of this rate cut back, they should pass it through in full."
On last night’s episode of The Project, Shadow Treasurer Joe Hockey agreed with Mr Swan, saying the coalition also expected the cut to be passed on.
"The Reserve Bank in their statement today actually said that the banks’ funding is not as bad as it’s been previously, it’s actually pretty good. So that would suggest the Reserve Bank is saying to the banks pass it on quickly and in full.”
Though Hockey also couldn’t resist a predictable swipe at the government, suggested interest rates may in fact be reaching dangerous lows.
“The movement by the Reserve Bank today was about the economy not performing as well as they expected, and they’re only one cut away from what was described three years ago as emergency levels.”
However with banks keeping their slice of each rate cut, actual mortgage rates still have a long way to go to reach their GFC lows.
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