With all the talk about the Census, the news about the banks reporting profits might have escaped your attention overnight.
It certainly hasn’t escaped the attention of Opposition leader Bill Shorten, who is set to ramp up his campaign for a royal commission, demanding the ‘greedy’ banks should be investigated for putting profits and executive rewards before its customers.
Specifically, Shorten has attacked the banks for not cutting mortgage lending rates to new record lows.
The Commonwealth Bank of Australia for example has just recorded an annual profit of nearly $9.5 billion, so you have to wonder why its customers weren’t afforded the full 25 basis point cut that the Reserve Bank presented.
However, according to the Australian Financial Review there simply isn’t the money available to lower rates, compensate despositors and deliver big dividends to shareholders.
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“The banks may be big an bureaucratic institutions, but they are still vulnerable to international shocks and downturns,” the Australian Financial Review writes.
“Most Australians are already despositors, mortgage holders and of course shareholders in the big banks — either directly or through their super. For a sizeable part of the population, all three. Something has to give,” it says.
According to Shorten, that something is a royal commission because “when they choose to pocket some of the reduction in the official interest rate instead of getting the economy going” they are undermining their case.
“There’s a culture in banking which puts the profits of banks, big profits, billions of dollars of profits ahead of the national interest and interests of mum-and-dad mortgagees, small businesses and people with large credit card rate interest debts,” he tells the Australian Financial Review.
“I think the first step to reforming banking is a royal commission,” Shorten says.
What do you think? Do banks in Australia need to come under close inspection to ensure they are acting in your best interests? Are you happy with the service you get from your banking institution?