Banks “gouging” their customers:PM

The Prime Minister says Australia’s banks have been “gouging” their customers -  and he warned they could face a “crack down” later this year.

A television interviewer had asked Mr Rudd to comment on a Reserve Bank report which said Australia’s banks had added an extra quarter of a per cent to the rates they charge their home loan and small business customers in particular.

“…the Reserve Bank is right,” Mr Rudd said.

“The banks have been gouging.

“That’s the bottom line here.”

Mr Rudd said the Federal government had responded in two ways.

Firstly, it had provided smaller lenders with a continuous source of credit, in the wake of the global economic crisis.

He said it had provided them with “some $16 billion worth, to keep them afloat as competition to the banks.

Mr Rudd said the government had also introduced “a whole bunch of tough new credit laws.”

He said these would allow Australia’s regulators “to crack down on gouging across the financial sector.

“And this will be an important change in the year ahead,” Mr Rudd added.

“…the regulators will have new powers to step in,” the Prime Minister said.

So far, the big four banks have not responded to the Prime Minister’s allegations.