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

My question is to the Treasurer. I refer the Treasurer to the Prime Minister’s failure to call on all banks to immediately pass on in full the recent interest rate cuts. Given that the national accounts released today reveal that household expenditure on motor vehicles fell by 7.9 per cent in the September quarter, what is the government going to do now—not in five or 10 years time but now—to save jobs in the motor retail industry, which is facing not only a shortage of credit but high interest rates?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the shadow Treasurer for her question. The Prime Minister, I think, accurately answered the question from the Deputy Leader of the Opposition before by saying that we call on the banks to pass through in full, as rapidly as possible, any Reserve Bank official rate cut. In the House yesterday, I noted that two of the majors did precisely that, and it was not just for mortgages; it was also for their business loans. That was good, and it was long overdue. The fact is that the banks do have more to do when it comes to business lending, and they certainly have more to do when it comes to credit cards, and we are the first government in a long time to put them under any pressure to so do. In 11 years, those on that side of the House could not even put in place a bank-switching package. They did nothing for 11 years. We are serious about ensuring that official rate cuts flow through to the economy and that the banks play their part when it comes to fiscal stimulus in this economy. We are very serious about it.

But I find the new position from the opposition quite remarkable. This is what the Leader of the Opposition wrote in an op-ed in the Australian on 21 January this year, when there was a debate about whether the banks should pass through in full—and, of course, that is precisely what I was calling on the banks to do at the time. Here is what the Leader of the Opposition wrote in the Australian at the end of January. Just listen to this. This is another example. Do not listen to what he writes; look at what he actually does. This is what he wrote:

… banks are free to price their products as they wish. After all, they are in the business of making profits and, all things being equal, they will charge as much for every product they have on offer as the market will allow them.

That is a repudiation of my position at the time that there should be a full pass-through.