Australian families are struggling to afford mortgages or pay rents in the current cost-of-living crisis. Growing inflation is making every day Aussies cut corners with fresh food and vegetables. The Reserve Bank continues to raise interest rates despite no wage price spiral.

Through all of this, Australia’s big four banks have profited from rising RBA rates. UBS forecasts reveal that the big four expect to earn a combined profit of $33.5 billion in the 2023 financial year. This is an increase on the $28.5 billion earned in 2022 and if realised would make this year the most profitable year on record for the big four.

I am calling on the big banks to stop making profits at the cost of Australians. Stop passing on the buck to customers even if the RBA raises rates, and return the trust Aussies have placed in you all these years.  

Banks' Net Interest Margins are improving when cash rates increase because banks are able to pass on more of the rate increases to their borrowers than they have to pay on their deposits. This is because most of the banks' deposits are short-term, while their loans are typically long-term. As a result, when the cash rate increases, the banks' cost of funding only increases slightly, while their interest income from loans increases more significantly. With 60% of banks' cost of funds coming from savers' deposits, this is a significant reason for banks reporting record profits.

Banks are not obligated to pass on the RBA's rate hikes or cuts to their customers. In fact, there is precedence for such behaviour. At the beginning of the COVID-19 pandemic, three of the big four did not pass on the 0.25% rate cut. 

In contrast, the big four banks have passed on the entire 3.5 per cent rate rise to their customers since May 2022. While 15 small Australian banks did not pass on the full extent of rate hikes to new customers. When it comes to savings accounts, however, banks have been relatively slow in increasing deposit rates. If just one of the big 4 would be socially responsible in this instance, the people will remember it and will be happy to be reminded of it through years that follows. Loyalty begets loyalty.

The banks advertise that they’re community-centred, and so there's no better time than now to act like it. In fact, the Australian Bureau of Statistics has revealed that the cost of living for Australian households has reached a record high, in the past 12 months. Some households registered a staggering 78.9 per cent increase in mortgage interest charges in the past year due to interest rate hikes. 

I am urging the people of Australia to unite in putting an end to this distressing situation by signing this petition.