Treasurer calls on banks to give rate rises to savers

Poppy Johnston | May 4, 2023

Banks should pass on the latest interest rate hike to savers without delay, the treasurer says.

Jim Chalmers has urged banks to apply the cash rate increase to deposit accounts as quickly as they are passing them on to borrowers. 

At the May board meeting, the Reserve Bank lifted rates another 25 basis points, marking the 11th hike in the relentless tightening cycle targeted at high inflation.  

“The main thing that makes people really unhappy in our community is the sense that interest rate hikes are passed on quite quickly to borrowers and sometimes more slowly to savers,” Dr Chalmers said in Canberra on Thursday. 

His comments were in response to a question about NAB reporting a cash profit jump of 17 per cent driven, in part, by rising interest rates.

Following the May hike, the bank did opt to pass on the full 25 basis point increase to both variable home loan customers and some of its key savings products on the same day.

But there have been concerns hikes across deposit products have been lower, slower and conditional, with the treasurer urging the consumer watchdog to investigate how banks are treating savers as interest rate settings tighten.

Also on Thursday, fresh Australian Bureau of Statistics data showed the trade balance climbing to $15.3 billion in March from an upwardly revised $14.1 billion in February.

The surplus was the second highest on record and above the $13 billion consensus guess.

Exports lifted 3.8 per cent over the month and imports rose 2.5 per cent month-on-month. 

The growth in exports was largely driven by an 11.6 per cent rise in iron ore exports and a 10.9 per cent lift in rural goods.