Government pressures banks on rates

Wayne Swan is blunt about it.

“The fact is that the  banks have to do more when it comes to business lending,” the Treasurer says.

“And they certainly have to do more when it comes to credit cards.”

He was speaking, of course, of the way Australia’s banks do – or do not – pass on the full rate cuts, announced by the Reserve Bank.

Swan recalled that he had praised both the NAB and the Commonwealth Bank for doing “just that.”

The response of the others, to Tuesday’s cuts, has been more restricted.

Swan recalled, too, that Malcolm Turnbull, who is now Opposition Leader, had written earlier this year that “banks are free to price their products as they wish.  After all, they are in the business of making profits.”

This was, of course, an attempt to embarrass the opposition, on a highly sensitive issue.

He took those words from an article Mr Turnbull wrote for The Australian newspaper.

The politicking, on this issue, has been intense over the past few days.

The Opposition’s Deputy Leader, Julie Bishop, had accused the Prime Minister, Kevin Rudd, of “failing” to urge the banks to pass on Tuesday’s rate cut,” even though the Australian economy is now in sharp decline.