Interest rates: what now Wayne?
Wayne Swan has a problem.
The banks think he’s a pushover. Several hundred thousand home-owners agree.
Now that the ANZ has joined the Commbank in defying public opinion and overshooting the Reserve Bank’s official interest rate increase, the federal treasurer finds himself in familiar territory. He’s really, really angry.
It’s cream-puff stuff - c’mon fellas, can you please stop putting rates up? Please?
The past week has shown that the banks couldn’t care less if the Federal Government uses the bully pulpit to shame them into restraint on rate hikes.
As far as tactics go, it’s pretty hard to shame the shameless. Despite wallowing in multi-billion-dollar profits the Commonwealth stumped for a .45 per cent increase and as of today the ANZ has gone for a marginally less offensive .39 per point hike.
We know that Wayne Swan doesn’t like it. Well, nobody does. The question the Gillard Government has to answer - and fast - is what are they going to do about it?
The poor showing of Labor in this week’s polls reflects the success the Coalition and shadow treasurer Joe Hockey have had in capitalising on public anger over bank megaprofits and rate hikes.
The ANZ’s act of defiance today only piles more pressure on the Government.
So far the Government has indicated it is cracking down on exit fees to make it easier for mortgagees to switch banks.
But what else should they be doing? Should they let market forces prevail? Should they step in? We throw this post open to our readers for their suggestions.
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