ACTU calls banks ‘greedy’ for not cutting rates

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ACTU calls banks ‘greedy’ for not cutting rates

The ACTU has condemned the major banks for not passing on this week’s interest rate cut, saying they are lining their pockets rather than helping to relieve the financial pressure for working families.

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The ACTU has condemned the major banks for not passing on this week’s interest rate cut, saying they are lining their pockets rather than helping to relieve the financial pressure for working families.
 
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 that 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.
 
Pocketing $125 a month
 
‘That is an extra $125 a month in average home repayment savings that the banks have pocketed,’ Burrow said.
 
‘And let’s not forget that the banks are still making billions of dollars from fees.’
 
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’, and 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,’ 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 party is over’
 
‘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.’
 
Burrow said 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,’ she said.
 
‘Now they are acting irresponsibly by refusing to pass on the latest cut to the cash rate onto struggling homebuyers, small businesses and consumers.'
 
Greater regulation
 
‘This will only increase community sentiment for greater regulation of banks and of banking executives’ remuneration.
 
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.
 
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