Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

I thank the member for his question. I can inform the House that the Reserve Bank has just announced that it will be reducing the official cash rate by 100 basis points to 4.25 per cent. We join with the families and the businesses of the nation in welcoming this very substantial relief. This is a vital rate cut from the Reserve Bank, delivered at a time when all our joint efforts are directed towards strengthening the economy and protecting Australian jobs. For these reasons the government does expect the banks to pass this on in full. Decisions taken by the RBA since September can give savings of up to something like $600 a month for families with a $300,000 mortgage.

I am pleased to say that I have just been informed that the Commonwealth Bank has just announced that it will be passing on the RBA rate cut in full. This means that someone with a $300,000 mortgage at the Commonwealth Bank will receive a monthly saving on their mortgage of $193 per month. This is certainly welcome news for all of those who have a mortgage with the Commonwealth Bank.

With this cut in official interest rates and the Economic Security Strategy that we have put in place and those payments coming on stream this month, monetary and fiscal policy are working together to give relief to families and to protect jobs. I would just like to quote from the Reserve Bank’s statement, which said:

Together with the spending measures announced by the government, and a large fall in the Australian dollar exchange rate, significant policy stimulus will be supporting demand over the year ahead.

So what we have is fiscal policy and monetary policy working in tandem to strengthen the Australian economy. That is why the government took early action. That is why the government took decisive action to support Australian families and businesses in the context of the global financial crisis. This means that all arms of policy are directed at buffering this country from the worst that the world can throw at us. That is why strong action and early action are so vital and the government will not hesitate to take further action should that be necessary.

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