Kevin Rudd by Bill Leak
Regardless of whether the Commonwealth Banks (CBA) decision to increase their variable home loan rate by 10 basis points to 5.74 per cent (you can read all about it here in a presentation released to the ASX last week) is right or wrong, the issue this highlights is that again Swan and Rudd continue their political careers as “toothless tigers” trying to rely on the popularity contest their government has become instead of actually doing something about it.
To demonstrate his disgust Treasurer Wayne Swan has branded the decision as “selfish“. I imagine these strong words would have put the fear of god into the CBA.
Of course his fears are that if other banks follow suit it will hinder the economic recovery which, of course, directly reflects on the government.
Well how about growing a back bone and giving them a reason not to.
For example – why not legislate the maximum fee payable to a bank when transferring a mortgage.
By my making mortgages transportable between banks this will surely create competition and will make banks question their rate rises.
Swan pointed out that he thought that “…Australians rightly will be furious with the Commonwealth Bank for hindering the efforts of the Commonwealth government, the Reserve Bank and the community to support our economy during the global recession.”
Well Mr Swan, if you understand what they are doing is wrong then why not do something about it? Don’t rely on the general publics anger to resolve the issue – you were voted in and given the power to changes things (BTW the way the author wishes to declare that he did not vote for the current government) so why not start flexing a few muscles.
Prime Minister Kevin Rudd also took the same angle advising that Australians have “every right to be furious”.
But again Mr Rudd, you were elected by the majority of the Australian public so you could act on our needs – or is it that you can’t?
It’s a cop out to blame banks. I mean lets face it – who really likes them? But what about some action instead of just conveying popular sentiment.
The big lenders are acutely aware that the competition provided by smaller rivals (who are predominantly funded by deposits) has the capacity to undercut the big banks by as much as 0.5 per cent.
How about making the cost to move mortgages an affordable administration fee and not an amount that penalises competition.
Rudd said that “We’re all in this together, businesses, workers, Government, the Reserve Bank…”.
Well…if it’s everyone versus the banks Mr Rudd I am sure that if you took action against them you would win the support of the general public. Very handy when it comes to the next federal election.
