Unlike the media and whosoever happens to be in Opposition at the time, I don’t believe in the idea that there is an implicit social contract between the Government, the RBA and banks on the one hand, and those with mortgages to repay on the other, to keep rates low.
There are people (self-funded retirees, for example) in the economy whose lives and livelihoods depend on good economic management and, sometimes, good economic management means having higher interest rates. Hopefully, those who take out home loans are aware of the concept of the market, and are aware that their interest rates will not remain stagnant forever. If they’re not, they shouldn’t have loans. (I do have a few centre-right opinions!)
That said, I understand that changes in interest rates can result in big (though hopefully manageable) changes to the budget of an individual or family and consequently the issue should be treated with sensitivity and care.
Which is why this video, sent via email to Westpac customers, is so surprising.
I get Westpac’s point. I sympathise with them. And I understand their frustration at being the scapegoat for public and governmental vitriol every time interest rates rise.
But seriously, which bright spark in PR department thought a banana smoothie stand was a good analogy? The use of bananas cheapens their argument, and makes a mockery of any claim the bank might lay to being an understanding and caring institution.
The saying used to be “pay peanuts, get monkeys.” It seems that for the Western Pacific Banking Corporation, it should be “Hire monkeys, get bananas.”
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Sorry I disagree, I think Westpac are greedy. If the other major banks did not find it necessary to hike up their rates ridiculously, why did Westpac? I guess they need to raise Gail Kelly's $3.5 million dollar bonus somehow!
ReplyDeleteThe banks generally collude. Every time they raise interest rates, one of them, and only ever one, will always raise their rates by more than the others.
ReplyDeleteAnd if people have a problem with it, they should go to a new bank. The government has made it significantly easier to move your mortgage from one bank to another.
Its a bit slimplistic to say that if people have a problem with their bank, they should go to another. Whilst indeed the government may have made it easier to move your mortgage, there are considerable fees involved in such transactions, thereby we end up "giving" the banks even more of our hard-earned cash!
ReplyDeleteCan i just say that the bigger problems with westpac's little video include:
ReplyDelete1. they still gave significant shareholder returns (as did the others);
2. they bitched about governments not stepping in (hardly representative of your market argument); and,
3. they still gave significant shareholder returns - what a crock!
And, as for Australia, there is not alternative:
WBC = CBA = ANZ = NAB
(just they're different sizes - same arseholes but in either small, medium, large or uber-large - there's no competition here, but to regulate for competition in the banking sector is extraordinarily difficult and Barnaby is full of it)!