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Banks cost of funds just an excuse

A new report has found the banks interest expenses have risen by less than the RBA’s rate hikes.

According to the Australian Institute report, the major banks have been profiteering by lifting rates above the RBA’s official moves.

All the major banks have consistently claimed that their costs are rising by more than the official rate moves.

I have no doubt that these banks are exploiting their market power to gouge excessive profits from their customers.

This year, the big four banks earned pre-tax profit of around $1,300 per annum for every man, woman and child in Australia. The latest round of interest rate rises shows just how insatiable their thirst for profits is.

Banking in Australia is essentially a rogue market in which a small number of winners take all. There is a clear case for government to take action with a combination of regulation, structural reform and improving competition.