Sydney -
Australian Prime Minister Julia Gillard said she was “angry” with the nation's major banks on Thursday and urged unhappy customers to change lenders, joining a growing row over interest rates and fees.
Gillard said her government was preparing a “comprehensive plan” to reform the banking sector following a backlash over the Commonwealth Bank's almost doubling of Tuesday's official interest rate hike for its customers.
“I'm angry and I understand why Australians paying mortgages are angry,” Gillard told commercial television.
“As the (central) Reserve Bank has said there is really no justification for interest rate movements above and beyond what the Reserve Bank independently decides our economy needs.”
The comments follow a strong attack by Treasurer Wayne Swan on banks after what he called a “cynical cash grab” by the Commonwealth, accusing lenders of arrogance as they rebound from the global slump with bumper profits.
Gillard and Swan are tapping into simmering public resentment over loan costs - set to rise after the central bank raised the official cash rate to 4.75 percent this week - which have hit mortgage-holders.
“What a pack of bankers,” said the front-page splash on Sydney's Daily Telegraph.
Thousands of customers are also expected to join a potential multi-billion dollar class action suit against a swathe of unpopular minor banking fees.
Gillard said the government was not taking up opposition calls to regulate banks' interest rates, but would instead promote competition, having already made it less costly to change mortgage-provider.
“We are increasing competition, which puts pressure on banks to do the right thing,” she said.
“What then keeps the banks honest is the pressure of competition of customers just saying: 'I'm not interested in your bank any more, I'm going somewhere else.’ ”
Gillard said Australia's banks - dominated by the “Big Four” of Westpac, Commonwealth, NAB and ANZ - helped it avoid recession during the financial crisis, after lenders eschewed the risky loans and investments seen abroad.
But consolidation in the sector as a result of the global slump has cut customer choice and helped the “Big Four” to bumper profits this year of between 20 and 84 percent. - Sapa-AFP