Interest rate – riddle me this?

The AFR reported today that NAB lifts home loan rates by up to 16bps.

Consistent with the usual performance theatre around home loan interest rate increases, Shadow Treasurer Chris Bowen said:

Australians will be very cynical at NAB making this move, not only because it is out of step with the [Reserve Bank of Australia], but it comes just a week out from the delivery of the banking royal commission final report to the government,

Fascinating this out of step with the RBA line that is wheeled out every time.  Not particularly relevant given that half or more of the wholesale funds the Australian banks get is not domestic and not related to RBA prices, but hey, performance theatre is performance theatre.  After all there are many, particularly in the opposition, who believe that prices are completely unrelated to the cost of inputs, especially the costs of energy, labour and taxes.  These people believe that increases electricity costs, labour costs and tax rates should have no impact whatsoever on prices.

But here is a more interesting question.  If the government and opposition get all huffy puffy about interest rates on loans going up, why don’t they get equally huffy puffy when the interest rates on deposits go down?  As they have recently to fund the increased cost of compliance and bank taxes.

Interesting world this is …. borrowers are sacred and savers are scum.

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8 Responses to Interest rate – riddle me this?

  1. The BigBlueCat

    The NAB just beat the ALP to the punch (of sequestering other people’s money) …. Bowen himself is particularly out of step – especially when it comes to negative gearing, capital gains and franking credits.

  2. John A

    Isn’t it because of the final report that the NAB (and soon the other banks) has lifted rates?

    If the RC report bashes them so hard that there are more price controls imposed, better to have rates at the high water-mark, surely?

  3. As a depositor, I agree. We’re definitely scum. And at interest rates that run below even official inflation levels.

  4. Bruce of Newcastle

    The pollies have been bashing the banks frenetically for the last couple years. They dumped an RC onto them. They sicced APRA and ASIC onto them because of “risky lending practices”.

    Now they’re complaining that lending conditions are too tight…

    Amazing! I think the banks should immediately foreclose on all loans to politicians, since it is abundantly clear you can’t believe anything they say and they’re financially clueless.

  5. tombell

    when your electoral constituency doesn’t save, is probably mortgaged to the hilt (or is permanently on the public teat and doesn’t really care) and expects “freebies” all the time – then guess what? Bowen is simply addressing “his” target audience. Swan delivered surplus after surplus remember. Whether Bowen actually believes what he says is problematic. Probably not.

  6. Dr Fred Lenin

    What would happen if US interest rates went up to a reasonable rate ,the defaults began , re possetion of homes ,collapse of prices The climate scam nleeding the people ,capital fleeing Venezuela sorry Australia ,and higher interest rstes on government borrowing ,they would have to recall swannie to get back into fake surplus . Can you imagine these leftist incompetents handling this scenario? They would be moaning that the value of the bribes they got were worth bugger all.

  7. Fang

    Heads up, Powers out in western Victoria! Check out powercor outage map! (If they gavent been told to shut website down!!!!!)

  8. Squirrel

    “Not particularly relevant given that half or more of the wholesale funds the Australian banks get is not domestic and not related to RBA prices.”

    The ability of Australian banks to import hundreds of billions in foreign-sourced funds should have been phased out after the GFC and the near failure (apparently) of one of the big four.

    It could have been done in an orderly way over a number of years, with the result that we would have less ridiculous property prices, and more incentive for saving across the community, because banks would have been forced to pay better rates for savers.

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