‘Lower rates as soon as you can’: Miles’s challenge to big four banks

Premier Steven Miles has called on Australia’s big four banks to drop interest rates to provide relief to Queenslanders amid unprecedented profits.

Premier Steven Miles has called on Australia’s big four banks to drop interest rates ahead of official moves by the Reserve Bank in order to provide relief to Queenslanders amid unprecedented profits.

The letters sent to the chief executives of Commonwealth Bank, Westpac, National Australia Bank and ANZ comes a week after Treasurer Cameron Dick demanded the RBA cut interest rates lamenting families had been punished enough.

The RBA earlier this week made no changes to the official cash rate, with governor Michelle Bullock not ruling out further rate rises as it remained unconvinced inflation was back on a sustainable path.

Mr Miles, in his letter, said Queenslanders were raising the affordability of owning a home as one of the most significant cost-of-living issues.

“I note in the past, banks have adjusted their borrowing rates ahead of the RBA. I urge you also to consider lowering rates as soon as you possibly can,” Mr Miles said.

“Last year, Australia’s major banks saw record profits with cash earnings soaring to an unprecedented $32.5bn. This means major banks profits are larger than ever before.

“These record profits come at a time that Queensland families are struggling with rising cost of living.”

The average monthly mortgage repayments have increase by $750 for a unit in Cairns, $680 for a house in Townsville and $1610 for a house in Everton Hills between April 2022 and November 2023 according to PropTrack data.

A major price gouging report authored by former consumer watchdog boss Allan Fels released on Wednesday found the banks – along with supermarkets, airlines and energy companies – were exploiting market power to drive up inflation.

The report, commissioned by the Australian Council of Trade Unions, also found Australia’s banking system was among the least competitive in the world and the major institutions were “well position to achieve gains at the expense of their customers”.

Professor Fels noted the big four banks had been able to raise their profit margins by enough throughout the pandemic period to ensure their profits have been higher than average through this era compared to the previous 15 years.

He called on the federal government to give the ACCC the power of a standing ministerial direction to monitor prices and competitiveness in the retail banking sector.

Mr Miles, in his letter, also noted reports the banks had $6bn allocated for bad loans that may not materialise.

“I urge you to use these funds to address loan affordability rather than profits, given the record profits already realised.”

In his inaugural Queensland Media Club speech as premier earlier this week, Mr Miles announced a $3.1bn plan to build one million new homes by 2046.

He said the housing shortage was a “wicked problem” caused by complex factors, including strong migration and global events.

Originally published as ‘Lower rates as soon as you can’: Miles’s challenge to big four banks