DAVID KOCH:
Treasurer, what are you going to do about these banks defying the move? Because in total this year, $725 should have been passed on to home loan borrowers. The banks have kept $289 of that for themselves.
JOSH FRYDENBERG:
Well, this is very disappointing by the banks and they have some explaining to do to their customers and their customers should vote with their feet. Some of the smaller lenders, Kochie, like Athena, have passed the interest rate cut in full and are offering variable rates at well below 3 per cent. But, I have to say that this has been a pattern of behavior by the banks over some time. When Labor was in office, there were fourteen different rate cuts and only five of those rate cuts were passed on in full. So, customers should make their concerns known…
DAVID KOCH:
You can’t legislate it, can you? Can you legislate the fact that banks have got to pass on the full cut?
JOSH FRYDENBERG:
We’re not about to legislate it, but as the RBA has made clear and we have made clear, the cost of borrowing for the banks has come down and then they should pass on these benefits to consumers. If you’re a household with a $400,000 mortgage, a full rate cut of twenty-five basis points would be worth $725 a year in lower interest payments.
DAVID KOCH:
Now, the Reserve Bank Governor, Philip Lowe, says he’s cutting interest rates, he needs help. Are you going to bring forward the mid-year budget review and add some stimulus to the economy? More stimulus than you’re actually doing?
JOSH FRYDENBERG:
Well, we’ll provide the Midyear Fiscal Outlook at the same time as normal and then we’ll deliver the budget next year. But I have to say, the RBA in their statement yesterday, Kochie, pointed to the benefits to the economy of the tax cuts, more infrastructure spending as well as the stabilisation in the housing market. And in their words, the “economy has hit a gentle turning point.” But I have to say what we’re doing is cutting taxes, whereas Labor’s plan for stimulus was $387 billion of higher taxes, that was not the answer for the Australian economy.
DAVID KOCH:
Okay, Treasurer, thanks for joining us.