Aug 102008

Such fantasy. A government which thinks it can command a market-driven, and currently market-restricted, finance industry. Clearly, the Rudd Labor government has been ensnared by it’s own populist rhetoric, in that while no-one in government has ever said they can control fuel and grocery prices, or interest rates, enough’s been said which infers these things in the minds of voters. The idiocy of Wayne Swan declaring that Bank’s had better watch out or he’ll exercise abilities no-one knows he has. What an absolute joke. About the only thing I agree with Piers Akerman on is the vacuous approach to the subject of interest rates Swan has taken. As for drawing parallels between Swan’s stupid claim and Costello as Treasurer not making such claims, this morning’s Akerman performance was right up there among the best cyclopian conservative media pundit moments. Piers Akerman. A pustule on the buttocks of his own profession.

The facts of the matter are plain and simple. Whilst the government may wish for major banks to follow the lead of the RBA, if and when it does cut interest rates, the realities are that no single major, or minor for that matter, banking institution in this country has yet declared it’s exposure to the global sub-prime debacle. The nearest we came to seeing a glimpse came last week when the NAB declared a capital raising issue through dividend re-investment by shareholders, which just happened to match a bond issue it was attempting to float. Clearly, even a major like the NAB is having difficulties buying money.

It’s all well and good to tell the great unwashed to seek a better deal from banks by pulling up stakes and taking their business elsewhere. Deferred establishment fees and early repayment penalties remain a brutal reality for Australian mortgage borrowers. Until the practice of penalising people for exercising their consumer rights is legislated out of existence, real competition within the finance industry in the country will continue to slumber on, heavily sedated by corporate greed and collective collusion.

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