Greens Deputy Leader and banking spokesperson Adam Bandt MP says any failure to pass on an interest rate cut by the big banks means the government should back the Greens' plan for tracker mortgages. Mr Bandt said the big banks have no justification to not cut rates while their profits continue to soar. He has called on the Treasurer and the government to back the Greens' proposal to require banks to provide a "tracker" mortgage product to their customers.
"Bank profits are soaring and will rise again this week, yet it is likely banks will continue to thumb their nose at the Reserve Bank decisions to cut rates." Mr Bandt said.
"The Government needs to do more than just ear bash the banks. It should get behind our plan to give consumers more choice. Banks should be required to offer mortgages and small business loans that only go up and down according to the bank's real cost of funding."
"These products - sometimes known as 'tracker' loans - are already being offered by some banks in Australia and in other countries such as the UK. We will make every bank offer them, so that customers can choose this kind of loan if they want to be sure they'll get the benefit of any rate cut in full. If the smaller banks like Queensland QT Mutual Bank can offer tracker mortgages the big four should be able to as well.
"Competition between banks will help lower the margin between the banks' cost of funding and their loan rate. Customers will still be able to choose other kinds of mortgage and loan products if they wish."
"Banks are quick to use the RBA rate to justify interest rate increases, but go slow when there is a rate cut. Despite how they behave, banks do not just exist to make a profit. They have also social obligations that should be met."
The recent Senate Inquiry into Competition within the Australian banking sector backed tracker mortgages as a way of keeping interest rates lower.
Mr Bandt's Banking and Consumer Credit Protection Amendment (Mobility and Flexibility) Bill is currently before the House of Representatives.