The ANZ bank has signalled that it will make an announcement then.

The three other big banks will be watching closely.

Meanwhile, the Federal Treasurer, Wayne Swan, has some advice for Australians who find that they are expected to pay more.

Put bluntly, it is “walk.”

“We’ve empowered the consumer,” Mr Swan said.

“So if the bank takes a decision with which they disagree they can walk down the road and get a better deal.

“ The standard variable rate on average from the major banks at the moment is 7.3 per cent.

“You can get far better deals than that elsewhere in the financial system right now,” Mr Swan said.

Where?

He had some hints to offer about that, too.

“We’ve strengthened the credit unions,” Mr Swan said.

“We’ve strengthened the smaller banks.

“What I want to see is red hot competition out there.

“That’s what we need in this system,” the Treasurer said.

Once again, Mr Swan described Australia’s big four banks are “extremely profitable.”

“So the notion that our banks can cry poor in this environment is simply not credible,” he added.

The banks are insisting though that they must be able to cover the now higher costs of the funds they borrow overseas, to lend to Australian home buyers and small businesses.

The Reserve Bank acknowledged that Australia’s banks are, indeed,  having to meet higher costs of this kind.

It did that when it surprised markets on Tuesday by keeping its marker rate at 4.25 per cent.

One well placed source said offshore funding accounted for about 20 per cent of the funds raised for  bank lending.

He estimated that this would add at least 0.1 per cent to their costs.

Another small cut had been widely expected.

However, the Bank’s Governor, Glenn Stevens, said  a “moderate” economic expansion is occurring in the United States.

He said too that  “acute financial pressures” in Europe  had been “alleviated considerably” late last year.

Mr Stevens also said that the two rate cuts, that the bank announced late last year, had left the rates Australia’s borrowers pay close to their “medium term average.”

“With (domestic) growth expected to be close to trend and inflation close to target, the Board judged that the setting of monetary policy was appropriate for the moment,” the Reserve Bank Governor added.

The decision has, at least, postponed a looming stand off between the Federal government and Australia’s big four banks.

The Treasurer, Wayne Swan, had called on those banks to pass on any rate cut in full.

He said that  banks which did not do so would be acting to protect their “huge profitability.”

The banks might well have resisted that demand, if the Reserve Bank had cut its marker rate.

Bank executives, including Westpac’s chief, Gail Kelly, argue that the costs Australia’s banks now incur, raising funds for home and business loans, has risen as a result of the European debt crisis.

The risk of an all out confrontation between the Federal government and the banks eased when the Reserve Bank kept rates on hold.

Mr Stevens did admit that more needs to be done to bring Europe’s debt problems under control,

“Much remains to be done to put European sovereigns and banks on a sound footing, but some progress has been made,” he said.

Mr Stevens admitted, though, that financial market sentiment “remains skittish.”

He also said : “information on the Australian economy continues to suggest growth close to trend,

Mr Stevens admitted, though, that differences between sectors still persist.

“Labour market conditions softened during 2011 and the unemployment rate increased slightly in mid year, “ he said.

However unemployment had been steady over recent months.

Consumer price inflation “has declined as expected,” he added,

Mr Stevens said that had happened as fresh food prices eased, as the large rises resulting  from last year’s floods, passed.

“Year-ended CPI inflation will fall further over the next quarter or two,” he added.

“In underlying terms, inflation is around 2½ per cent,” Mr Stevens said.

The Bureau of Statistics reports that the price of the goods we export  fell by 1.5  pe r cent, in the December quarter.

But import prices rose by 2.5 per cent in that time, as oil prices continued to rise sharply.

Our performance over the full year, though, was better.

The prices we receive for our exports rose by 14.3 per cent in 2011.

Import prices also rose, in that time, but only by 4.7 per cent.

Worries over the instabilities flowing from Europe’s debt worries are believed to have contributed to the softening, which appeared in the final months of last year.

Recent  predictions suggest this squeeze could tighten, even more, in the year ahead.

The price of the fuels Australia imports has been rising very sharply.

They rose by 5.6 per cent in the final three months of  last year – and by 29.6 per cent over the 12 months to the end of December.

What, though, of the detail?

The Bureau reports that:-

Imported fuel prices rose by 5.5 per cent in the December quarter.

Over the year, imported fuel prices leapt by 29.6 per cent.

The Bureau also said the price of imported clothes rose 5.8 per cent in the December quarter.

It said the depreciation of the Australian dollar against some of our major trading currencies had contributed to these rises.

The Bureau noted that the fall in Australia’s export prices, in the final three months of last year had been driven mainly by falls in the prices received for metal ores, cereals and textile fibres.

It said these falls had been partly offset by rises in the prices received for gold.

This result appeared figures the Australian Bureau of Statistics published today.

The Federal Department of Foreign Affairs and Trade was delighted, noting that this was the nation’s ninth consecutive monthly trade surplus.

It hailed that as “ a solid performance in the face of continuing global economic uncertainty. “

In its statement, the department said a 32 per cent rise in exports of non-monetary gold had partially offset by lower exports of metal ores and minerals.

This had boosted total exports, that month.

The Department also noted that exports of manufactured goods had risen by 4 per cent, with exports of transport equipment up 10 per cent.

Rural exports rose 1 per cent, with shipments of cereal grains and preparations up 16 per cent.

Exports of metal ores and minerals fell 4 per cent in November, as shipments of iron ores and concentrates fell 22 per cent on lower volumes and prices.

Australia’s merchandise exports to North Asia were down 8 per cent in November, although a 7 per cent increase in total exports to the Republic of Korea was driven by a sharp rise in coal exports.

Services exports fell 2 per cent and services imports rose 1 per cent in November.

The rise in total goods and services imports was driven by a 6 per cent rise in capital goods imports, the Department said.

Although the Reserve Bank has now cut official interest rates by a total of 50 basis points, over November and December, the banks have passed on only a fraction of that cut, at best, to their rural customers.

Yet it is those very farmers who have  produced the hams and turkeys that the bankers, themselves, will enjoy at Christmas.

One financier, Suncorp Agribusiness, stands out, in the results of a survey that the National Farmers Federation has just published.

It – alone – has passed on the cuts, in full.

The Federation said “Suncorp Agribusiness reduced its term loan rate by 0.25 per cent in November and another 0.25 per cent in December, matching the Reserve Bank of Australia’s (RBA) interest rate cuts.”

The Federation also said Four other banks, ANZ Agribusiness, Bananacoast Community Credit Union, Bendigo Bank and Westpac Agribusiness also reduced their term loan or overdraft rates in December by between 0.03 per cent and 0.25 per cent.

But it noted that among the big four banks, only the ANZ had also reduced its rates last month.

John McKillop, who chairs the Federation’s Economics Committee said: “We…. appreciate that unstable financial markets continue to dominate headlines, and that the economic turmoil in Europe is having an impact on credit markets both at home and abroad.

“However, in saying that, the NFF is keen to ensure that Australian farmers are getting the best possible deal from their financial lenders, and that these lenders are competing aggressively for their agribusiness customers.

“That’s why we created the Agribusiness Loan Monitor – to provide transparency for farmers as to how the banks are adjusting their agribusiness loan rates and to help them make informed decisions about their finances,” Mr McKillop said.

Get the full picture.

The Reserve Bank admits, in a bulletin just released, that it has been maintaining a “mildly restrictive” stance in its monetary policy.

However that might not be necessary in future.

The bank says that while Australia’s inflation is “expected to pick up a little” it should also remain consistent with its target rate.

The bank aims to keep Australia’s underlying inflation  within a 2 -3 per cent range, over the course of a business cycle.

It  says inflation should remain about its present levels, if wage growth remains about “its current pace.”

The Bank says its “central scenario” continues to be one in which the European authorities do enough to avert a disaster, but are not able to avoid periodic bouts of considerable uncertainty and volatility.

“A worse outcome in Europe would adversely affect the Australian economy, and underlying inflation would be likely to decline,” the bank warns.

“The main upside risk to inflation comes from growth in unit costs turning out to be faster than is currently expected due to either a continuation of low productivity growth or a pick-up in wage growth,” it adds.

The bank admitted that it  has been concerned, for most of the past year, about the potential for inflation to be above the target band over the period ahead.

“Given these concerns, it has maintained a mildly restrictive stance of monetary policy, with most lending rates in the economy a little above their medium-term averages,” it admits.

“Broader financial conditions have also been tighter than normal, with credit growth subdued, the exchange rate at a high level and asset prices lower than earlier in the year,” it says.

These financial conditions have helped contain the inflationary pressures in the economy, with underlying inflation a little below the midpoint of the target band.

“At its meetings over recent months, the Board has reviewed the improving outlook for inflation and ongoing moderate growth in the overall economy,” the bank says.

“At its November meeting, the Board judged that a more neutral stance of monetary policy was now appropriate given that, over the period ahead, inflation was likely to be consistent with the medium-term target and that economic growth remained moderate.

“As a result, after holding the cash rate steady at 4.75 per cent since last November, the Board reduced the cash rate by 1?4 percentage point to 4.5 per cent.

“At its future meetings the Board will continue to set monetary policy so that it is consistent with achieving sustainable growth and 2–3 per cent inflation over time,” the bank concludes.

The Agricultural commodities report for the December quarter, published by the Australian Bureau of Agricultural and Resource Economics makes this forecast.

It credits both higher exports and relatively favourable agricultural prices.

The Federal Agriculture Minister Joe Ludwig, described these estimates as “welcome news.”

Recent rains, particularly in the West Australian wheatbelt town of Williams, though, have not been.

Late rains can wreak havoc on unharvested wheat crops.

Overall, though, the Bureau still expects, export earnings from wheat to rise by 3 per cent.

Mr Ludwig hailed the peformance of Australian farmers.

“During my visit to North Asia this past week, I’ve been encouraged to see so much Australian produce on supermarket shelves,” he said.

“ABARE’S forecasts the demand for agricultural products in the Asian region is expected to remain strong, with more than 60 per cent of Australia’s farm exports to the Asian region in 2010-11,” Mr Ludwig added.

ABARE also forecasts that livestock and livestock products will increase by close to 2 per cent in 2011-12, reflecting higher lamb turn-off rates and increased wool and milk production.

“The good news continues for livestock producers, who are expected to continue to rebuild herd and flock numbers to take advantage of relatively favourable seasonal conditions,” Mr Ludwig said.

Fisheries and forestry export earnings are forecast to increase too, to around $1.4 billion and $2.5 billion in 2011-12 respectively, taking the total value of Australian agricultural, fisheries and forestry exports $38.4 billion in 2011-12, an increase of around 6 per cent from $36.1 billion in 2010-11.

“The forecast for increased export earnings is good news for producers at any time, but particularly when world economic growth is expected to slow down,” Mr Ludwig said.

“The forecasts in this report are great news for Australia’s agricultural, fisheries and forestry exporters and are evidence of the hard work and ground-breaking approaches adopted by Australian producers,” he said.

The Prime Minister said her reshuffle has been designed to keep the Australian economy strong and spread the benefits of national prosperity to all Australians.

Key ministers, such as the Treasurer, Wayne Swan, keep their jobs.

Ms Gillard’s announcement followed the Resignation of Small Business Minister Nick Sherry, a Tasmanian.

The Prime Minister said Mr Combet would retain his Climate Change responsibilities.

She said, too, that Chris Evans would become Minister for Tertiary Education, Skills, Science and Research.

Bill Shorten will become Minister for Employment and Workplace Relations.

The Left’s Kim Carr, a Rudd supporter, will be pushed to the outer ministry, with the junior portfolios of Manufacturing and Defence Materiel.

Bill Shorten will become Minister for Employment and Workplace Relations.

In appointments that will increase the responsibilities of women in her Cabinet, Ms Gillard also named Tanya Plibersek as Health Minister and Nicola Roxon Attorney General.

Robert McLelland will become Australia’s first Minister for Emergency Management.

Jenny Macklin will remain Minister for Families, Community Services and Indigenous Affairs, but be sworn in also as Minister for Disability Reform.

Tasmanian MP Julie Collins will join the ministry, with responsibilities for Community Service, Indigenous Employment and Status of Women.

Sid Sidebottom will become Parliamentary Secretary for Agriculture, Fisheries and Forestry.

This is a direct result of Julia Gillard’s victory last week, in elevating a former Opposition member, Peter Slipper, to the Speaker’s chair in Federal parliament.

That has given her minority government one extra vote, as the former speaker, Harry Jenkins, will be returning to the floor of the House, to vote with fellow Labor members

It also takes a vote from the Opposition, as the Speaker traditionally abstains from voting on major issues, in normal circumstances.

The government has made no secret of its belief that the rebate should be means tested.

However, it has been unable to apply that test, so far, because it did not have the numbers to push that measure through parliament.

Its ability to do that is still in doubt, but the task will, at least, be easier, with just three independents, instead of four, to convince.

And the government is under pressure, on all sides, to find whatever savings it can, to get its budget, for the new financial year, into surplus.

The Treasurer, Wayne Swan, admits that instability on world financial markets is slowing parts of the Australian economy.

That reduces revenue flows.

The government has already shown that it is prepared to resort to unattractive options, to raise extra cash, as it did with its deferral of a promised tax break, on overseas bank transactions.

The government will be sorely tempted to means test the private health insurance rebate.

The rebate cost it $3 billion in 2004-05.

So it’s a big ticket item.

It would, of course, face bigger bills for public hospital treatment, if it did so.

However those would be  much lower than the savings it would make on the rebate.

And Mr Swan is making no secret of the fact that he believes he is trapped between a rock and a hard place, right now.

This follows talks the government held with two key independents, Tony Windsor and Rob Oakeshott.

The independents declared their support for the government’s controversial minerals rent tax, after those talks.

Their declaration was quickly followed by a statement issued jointly by the Prime Minister, Julia Gillard and the Treasurer, Wayne Swan.

They said: “coal seam gas and coal can bring huge opportunities – but to do so must maintain community confidence, especially in regard to impact on water.”

The government said it had:“ moved to ensure that all future decisions about coal seam gas projects and large coal mining developments are based on the most rigorous scientific evidence available.

“This can only be achieved by ensuring all environmental approvals and licensing decisions are made on the basis of transparent, objective scientific evidence,” the government said.

“The new science-based framework being introduced by the Government will provide certainty for regional communities around coal seam gas and large coal mining developments, jobs and investment, as well as protection of water resources.” it added

The Government also promised to:-

* Provide $150 million to establish a new Independent Expert Scientific Committee that will provide scientific advice to governments about relevant coal seam gas and large coal mining approvals where they have significant impacts on water; oversee research on impacts on water resources from coal seam gas and large coal mining projects; and commission and fund water resource assessments for priority regions.

* Establish a new National Partnership Agreement with the states through COAG, agreeing that the Commonwealth and states have to take into account the advice of the Committee in their assessment and approval decisions.

* Provide $50 million in incentive payments to the states to deliver this outcome and

* Mandate that the Independent Expert Scientific Committee publicly disclose its advice to ensure local communities have all the best information available to them.

It said these arrangements will provide all Australians with greater confidence that projects will be subject to rigorous and objective scientific assessment.