Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

My question is to the Prime Minister and again refers to the national accounts and interest rates. Is the Prime Minister aware that the National Australia Bank is now charging a new liquidity margin of 0.3 per cent on market rate loans? Given that agriculture, forestry and fisheries is one of the few industries delivering economic growth, why won’t the Prime Minister put pressure on banks to bring down the interest rates on farm loans and overdrafts rather than inventing new revenue-raising surcharges?

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

I thank the Leader of the National Party for his question. Presumably the bank in question listened carefully to what the Leader of the Opposition had to say in January when he said:

But banks are free to price their products as they wish. After all, they are in the business of making profits …

That is the stated doctrine of the alternative Prime Minister of the country, the Leader of the Liberal Party, unless he chooses to disavow those remarks—and I would be happy to see him do so, if he wished to do so.

Our response to the banks is as reflected in my remarks earlier today to the parliament as well as by the Treasurer and others, and that applies not just to mortgage holders; it applies also to business loan holders, including those in our hard-pressed regional and rural areas including our farm producers. As the Treasurer indicated before, in the case of two of the banks there has been a decision to pass through the official rate cut of yesterday to their business lenders as well. That is welcome. I would join with the comment made yesterday by the Minister for Agriculture, Fisheries and Forestry and again today by the Treasurer, and that is for the banks to do everything possible to pass through official rate cuts to all Australian users of credit, whether they are in farm areas or in metropolitan areas, whether they are in small business in cities or running farms in the country. These are all part and parcel of the Australian economic story.

As the Leader of the National Party correctly pointed out in his remarks, the performance of the farm sector has been of critical importance to the national accounts performance of this entire Australian economy in the quarter just past. Therefore, this government will continue to work with the banks to ensure that we put maximum pressure on the banks to pass through official rate cuts to all users of credit as rapidly as possible. That was our policy in the past. That is our policy in the future. We certainly do not have a policy which says: ‘Banks should be free to price their products as they wish. After all, they are simply in the business of making profits.’ We have a wider view of the responsibility of government than reflected in the free-marketeering orthodoxy underlined by these remarks by the Leader of the Opposition in an opinion piece under his name and deliberately written in January this year.