Rudd 'tough as marshmallow' on banks

PRIME Minister Kevin Rudd is about as "tough as marshmallow" in demanding that retail banks pass on the latest official interest rate cut in full,...

Rudd 'tough as marshmallow' on banks

PRIME Minister Kevin Rudd is about as "tough as marshmallow" in demanding that retail banks pass on the latest official interest rate cut in full, Family First senator Steve Fielding says.

The Reserve Bank cut its official cash rate by 75 basis points this week, but the retail banks have only lowered their standard variable rates by between 58 and 65 basis points, blaming high funding costs because of the global financial crisis.

"Banks are not passing on rate cuts but still making massive profits and getting away with it because they see Prime Minister Kevin Rudd as a soft touch," Senator Fielding said.

"Tough times need tough action but when it comes to the banks the Rudd Government is about as tough as marshmallow and ordinary Australians are paying for it."

He said banks had decided to keep a chunk of the interest rate cut for themselves and the Rudd Government had let that go through to the keeper.

"The Prime Minister needs to get out there and bat for ordinary Australians," he said.

He said the banks are in good shape with profits still at high levels.

The Government has gone to great lengths to ensure the banks are financially stable and that the savings of ordinary Australians are safe, but the banks should not take advantage of the financial crisis to line their own pockets, he said.

"The Rudd Government needs to get rid of the marshmallow attitude and get some steel and toughness into its approach to the banks," he said.