Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer to the Prime Minister’s failure to call on all banks to immediately pass on in full not only the recent interest rate cut but also the previous three interest rate cuts. Given the fact that Australians now owe almost $45 billion on their credit cards, how can the Prime Minister expect people to spend the upcoming stimulus rather than pay off their credit card debt when they are still paying interest to the major banks of around 19 per cent?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the honourable member for Curtin for her question. It goes to the question of interest rates and pass-through to all categories of consumers. I have just come across, interestingly, an opinion piece written by the Leader of the Opposition back in January in the venerable national journal of repute the Australian

Opposition Members:

Opposition members interjecting—

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Have you got a problem with Aus, have you? I draw the member for Curtin’s attention to this, and I quote the Leader of the Opposition. He said:

Banks … will charge as much for every product they have … as the market will allow …

Here we have the free marketeer at work—the free marketeer on interest rates, the ‘member for Goldman Sachs’—in full flight in January of this year, effectively saying that banks should charge as much as they can get away with. Yet today we have, in a highly coordinated attack from the other arm of the opposition, the Deputy Leader of the Opposition, a suggestion that governments should, in fact, dictate the reverse.

Our policy is clear cut and it has been throughout—namely, we call upon the banks, and have done so from the beginning, to provide pass-through of interest rate cuts by the Reserve Bank as rapidly as possible, and we have maintained that position. I note the decisions yesterday by two of the banking majors to pass on 100 basis points of the cut. The other two are to pass on 80. For those who have not passed on the full amount, our call remains the same: to pass on the full amount as rapidly as possible.