Banks should show some heart towards struggling working families, unions urge
23 July 2008
Unions are urging banks not to further compound the financial stresses on Australian working families by raising interest rates following the rise in the Consumer Price Index in the June quarter.
ACTU President Sharan Burrow says the big banks need to show some restraint towards families buckling under high home loan repayment costs and rents, along with soaring prices of fuel and basic living needs.
“Banks have just put up their interest rates for the fourth time independently of the Reserve Bank this year,” Ms Burrow says.
“Home buyers with a typical loan are now paying an extra $100 a fortnight more than they were at the start of the year.”
The Australian Bureau of Statistics’ CPI data also shows that the cost of banks’ deposit and loan facilities, including fees, rose by 9.5 per cent in the June quarter.
An ACTU submission to a federal government Green Paper on Financial Services and Credit Reform says that banks’ borrowing costs have been subsidised by the government, but they have not passed the savings onto their customers.
The big four banks recently reported combined half-year profits of $8.8 billion.
The ACTU is also concerned that banks and other lenders were allowed under the former Federal Government to push vulnerable families into higher levels of debt by forcing sales staff to rely on performance bonuses to boost their shrinking base salaries.
“The banks’ sales target-driven approach has caused many families to take on more debt than they can afford and is putting their staff under unreasonable pressure,” Ms Burrow says.
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