Al-anwar Newspaper English news in Australia
Prime Minister Anthony Albanese has slammed Australian banks for failing to increase interest rates for savings accounts.
On Tuesday the Reserve Bank of Australia increased the cash rate for the tenth consecutive time, with the 3.6 per cent rate being the highest since May 2012.
Asked about his view on the big banks passing on rate increases for mortgages but not for savings accounts, Anthony Albanese said it was “an outrage” and “absolutely unfair.”
“If you are putting up interest rates on mortgages, the money that you’re handing out, you should also be putting up the interest rates on the money you receive in order to lend out,” Mr Albanese said.
“That’s just common sense, and the banks for too long have been very slow.”
The Prime Minister acknowledged the government does not have the power to force banks to pass on interest rate increases to savers, but he said they could pressure them to do it.
“We don’t have power to [force them]. What we do have power to do is to put pressure on them,” he said.
In February, the Albanese government directed the Australian Competition and Consumer Commission (ACCC) to commence an inquiry into how banks set interest rates for savers, after concern about the difference in rate increases for home loans and bank deposit accounts.
The ACCC said in a statement announcing the inquiry:
“As the cash rate target set by the Reserve Bank of Australia has increased from 0.1 per cent to 3.35 per cent, in most cases banks have fully passed through the cash rate target increases to their home loan interest rates.”
“However, the increases in interest rates on deposit products appear to have typically been smaller and less consistent.
“In many cases, banks have only applied increases in the cash rate to some of their deposit products, often with conditions attached.”
Just two days after the ACCC inquiry was announced, two banks (NAB and ANZ) said they were passing on the RBA’s rate hike to savers.
And on Wednesday, RateCity – a comparison website that tracks bank interest rates – reported savings account interest rates have “broken the 5 per cent barrier,” with an additional four banks having rates of 4.75 per cent or more.
“Another rate hike this month could see more bank’s ongoing savings rates climb above 5 per cent,” the RateCity statement said.
