Friday, February 6, 2009

Gottliebsen was Spot On

Robert Gottliebsen, writing in the Business Spectator yesterday, made comment on the unique way in which government is pressuring the banks to pass on cuts in the official cash to their home loan borrowers straight away and in full, while no mention is made of how and when rates are cut for the biggest employer in Australia, the small business sector.

The RBA’s Statement on Monetary Policy issued today not only bears this view out, it reinforces it.  The Statement devotes considerable space to the topic of how well Australian banks have done in passing on rate cuts to home borrowers, in comparison with banks in a number of other countries (who have by and large retained huge margins for themselves).  Alas for small businesses around the country (and by extension the people they employ, the people they might have employed and the people they used to employ) the story hasn’t been so kind, as the following extract from the Statement shows:


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