Monday, 1 September 2008
Questions without Notice
I thank the member for his question. Yesterday, Wizard Home Loans announced that it would be cutting its standard variable home loan rate by 25 basis points and, of course, this will be welcome relief for those Australians who have a mortgage with Wizard. Wizard has thrown down the gauntlet to all of its competitors. I guess we expect, as all Australians expect, all banks to pass on, within a reasonable amount of time, in full, any official RBA interest rate cut. The government expects it, the people of Australia expect it and, in particular, those people who have been receiving interest rate rise after interest rate rise expect it.
Something like 740,000 Australians have taken out their first home loan in the past 7½ years and those 740,000 Australians have never experienced an official cut in the RBA rate, so they most certainly will be expecting the banks to pass on any relief in full. Assistant Governor Lowe of the Reserve Bank has made it very clear; he has said that banks simply have no excuse at all for not following the official cash rate down.
We do understand that families are doing it tough. We understand that 10 interest rate rises under those opposite, 12 interest rate rises in total, have put families under tremendous financial pressure. We also understand that we are not out of the woods here yet. That is why it is so important that banks do the right thing and follow the Reserve Bank decision down, if that is the way it goes when the announcement is made tomorrow. If the official rate does come down, it is important that banks pass it on in full so that families get the relief they deserve.