Greens unveil plan to bring back state-owned bank, slash mortgage costs

The Greens are set to launch an ambitious proposal to bring back a bygone institution, claiming it will save the average home owner-occupier $6000 off their mortgage.

The Greens will on Monday launch an ambitious proposal to bring back state-owned banks, claiming it will save the average home owner-occupier $6000 off their mortgage.

It comes after Premier Steven Miles last week hatched a controversial plan to introduce government-owned petrol stations to help bring more independent fuel retailers into the market.

The Greens say the creation of a Queensland bank would have a larger impact on homeowners struggling under inflation pressures, arguing pockets are being hit most in the housing sector.

Greens MP Michael Berkman said the big four banks were cashing in on the housing crisis and a public bank – similar to the Kiwibank in New Zealand – would create market competition to help drive down home loan interest rates.

“Right now, on average, $400 of every monthly mortgage payment you’re making is going into pure profit for the big banks,” he said.

“While people are forgoing things like fresh fruit and veggies just so they can make their mortgage payments, the big banks are making $30 billion in profit every year.

Greens MP Michael Berkman

“It’s time we brought back publicly owned banking here in Queensland to take the pressure off families and first home buyers.”

Under the proposal, the state-owned bank would undercut interest rates offered by major banks by 1.5 per cent.

With average mortgages in Queensland currently sitting at around $530,000, the Greens calculate owner-occupiers could save $514 each month off mortgage repayments, or $6,165 every year.

A family with a $750,000 mortgage would save $725 per month or $8.703 per year.

Families unable to keep up with repayments would also be given the option to sell their home to the bank to become public housing, while continuing to live there indefinitely.

The Greens argue that major banks are making an annual 33 per cent profit on mortgage loans but a public bank could operate successfully off an 8 per cent net profit.

The bank would be regulated through usual federal mechanisms, APRA, ASIC the RBA and the Australian Treasury.

More than two decades have passed since publicly owned banks existed in Australia after the federal government sold the Commonwealth Bank for $8bn in 1991.