Published: 5 Jun 2012
Australia's big four banks must quickly pass on the Reserve Bank's interest rate cut in full to ease the cost of living squeeze for working families, say unions.
ACTU Secretary Dave Oliver said banks could not continue to ignore the official decision in favour of their own self-interest.
"The Reserve Bank has now cut interest rates twice in two months and Australia's big four banks cannot again use it to line their own profits," Mr Oliver said.
"Last month, when the Reserve cut the official rate by half a per cent, not one major bank passed it on in full, yet in the preceding months they were quick to lift rates even while the central bank kept them on hold.
"It is not surprising that the gap between the Reserve Bank's official interest rate and bank rates is the biggest it has been in 18 years."
Mr Oliver said hardworking homebuyers shouldn't be forced to pay the price of the big banks fattening their margins to chase huge profits.
"Australia's big four banks have almost unparalleled dominance of the Australian market," Mr Oliver said.
"Their failure to pass on the Reserve's cut to interest rates impacts on four out of every five home loan borrowers.
"Complaints by the banks of higher borrowing costs than a year ago are unlikely to reach sympathetic ears as long as they keep engineering their enormous profits. The banks have no excuse but to pass on today's rate cut in full.
"The big four banks last year recorded a combined $25.2 billion, while the combined salaries of the four major banks' CEOs totaled $28.6 million. At the same time, Westpac and ANZ are slashing jobs."
