The government wears some blame for higher home loan rates

On the back of CBA’s profit estimate (nearly equating to $6bn p.a.!), the Federal government MUST withdraw all support immediately. The Federal government has guaranteed all bank customer deposits and has provided the banks access to a loan guarantee (to help them fund new and existing loans to customers). Clearly, the banks no longer need this support and providing it only makes them bigger and stronger and reduces competition. It’s this lack of competition that has allowed them to increase rates above official RBA rate increases. At a bare minimum, the government must withdraw all support NOW (something they should have done months ago). They haven’t done so and therefore I hold the government partly responsible for the banks arrogance and rate hikes. Wake up Mr Rudd – your action is needed to re-cultivate competition in the Australian market. There is always a time lag with these things so I think we haven’t seen the worst of this lack of competition yet... stay tuned for more bad news.