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Coalition calls on banks to pass on full 1 per cent rate cut.

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Luke Hartsuyker MP

Shadow Minister for Competition Policy and Consumer Affairs Federal Member for Cowper

Media Contact: Greg Pierce 02 66 52 62 33 0408 532 785 Canberra: 62 77 4447

Media Release

February 3, 2009

Coalition calls on banks to pass on full 1 per cent rate cut

Shadow Minister for Competition Policy and Consumer Affairs, Luke Hartsuyker, today called on the banks to pass on the full 1 per cent reduction in interest rates.

The Reserve Bank of Australia this afternoon cut the cash rate by 1 percentage point to 3.25 percent.

“All banks have a responsibility to pass on the full rate reduction,” Mr Hartsuyker said.

“The cuts should apply to home mortgages, credit cards and business loans.

“The Rudd Government has gone soft on the banks and despite the economic crisis many of them have not passed on previous interest rate cuts by the RBA.

“Given the benefits the banks have enjoyed as a result of the Government’s bank guarantee, it is incumbent on them to give consumers and business a fair go.

“In the past when the Reserve Bank has increased the cash rate, banks have been quick to increase the home mortgage rate. Now that the RBA has reduced the rate the banks must pass on the full reduction.

“Business owners have also been hit hard by the failure of many banks to pass on interest rate reductions. This is placing many businesses under extreme pressure and also jeopardising jobs.”

Mr Hartsuyker said credit card holders were also paying extremely high rates.

“The reality is that the credit card interest rate on existing accounts is way too high. Consumers are simply paying too much on their credit card debt. If you check the existing interest rate on many of the credit cards offered by the four big banks, you find they are as high as 21 per cent.

“Many Australians are experiencing difficulty repaying the debt on their credit cards, particularly low income earners who may be suffering serious hardship in trying to pay their bills,” Mr Hartsuyker said.