Lisa: Treasurer Scott Morrison is stepping up his battle with the big banks to stop them ripping off customers with unwarranted rate rises.
Our finance editor, Ross Greenwood, joins me now. Good morning to you
Ross: Good Morning
Lisa: The treasurer is talking tough…
Ross: He is talking tough and I mean this is really going to be a battle between the banks because on one side, remember, that you’ve got Ken Henry, who’s the chairman of the National Australia Bank, the former Treasury secretary of Australia, the man who had his hands on the levers of the controls of our economy.
Now the fight between Scott Morrison and Ken Henry is an absolute beauty, because they’ve both got knowledge, they both got skin in the game, and right now Ken Henry, the man who argued for the mining tax – the resources super profits tax – is arguing against the bank tax!
Now, the public of course, is sitting there going what does it mean for us?
And as we’ve said, well – the banks, if they possibly can, we’ll pass it on to you.
But, what Scott Morrison is saying – well I’m going to get the AAAC, the competition regulator, to come in and see whether any rate rises, whether any price increases, are justified and I’m also going to try and increase the competition on those banks to make certain they don’t pass those rate rises on.
Lisa: What, what’s on the treasurer’s side is there’s very little sympathy in the public arena for the banks because of those multi- multi-billion dollar profits…
Ross: Well, not only those multi billion-dollar profits that they make, $30 billion a year, everybody knows that’s big, they are the four biggest companies in this country.
But on top of that, what you also know is that they have actually stared down the last of the wild courtesy of the government – a Royal Commission.
There have been massive calls, even from inside the coalition ,for a Royal Commission into the banks and their poor behavior in financial planning.
If Bill Shorten and Chris Bowen become the next government in Australia, they’ve already said that they will call for that Royal Commission into the banks.
So the banks are going to be very careful what they wish for right now – their trying to fight off this.
Now, one part about this is if the banks try and actually pass any of these rate rises on, it’s up to consumers to do something about it.
So here’s a quick little observation this morning – the National Australia Bank.
Its standard variable rate, right now – you might get a reduction on this – is 5.23 percent – it was very easy to find that HSBC has got a standard variable rate that’s 3.75 percent.
On loans.com.au, 3.64 per cent you bank which was owned by the National Australia Bank – mind you, owned by the National Australia Banks- its online bank 3.74 per cent.
You do not need to pay what the big banks charging!
Lisa: So it’s only the big five banks that are being affected…
Ross: Yes, the big four plus Macquarie…
Lisa: so with Ubank given, that owned by NAB, is that going to be affected by the levy?
Ross: Well, it may be, but it’s going to be at the margin because you can already see the difference.
Ross: Now even if you get a discount of one percent off the NAB’s rate – so from 5.32 to 4.32 – we could still say you go to their own bank online…
Ross: They get a 0.6 percent discount off that.
Now if you don’t do that, then you’re adding to the profits of the banks.
Ross: So you know it’s really an important thing that people understand competition.
But of course, for many people, they say well it’s too hard the change too hard to move… well actually, if you don’t, you’re costing yourself money potentially.
This is where the fight comes down and I have to say its going to be a very very interesting philosophical conversation
Lisa: It sure is – thanks!