Government Tax Breaks, Banks Quote Hannibal Lecter & Lambs Stay Silent
Eric Johnston from the Age writes: “BANKS will find it tougher to apply out-of-cycle interest rate rises on home loans if, as expected, the Henry review of the tax system urges the introduction of a tax break on savings.”
I know it’s a matter of semantics Eric, but the smart money says that banks will continue to apply out-of-cycle interest rate rises.
“A tax break on savings would be a big benefit for banks because it could generate more than $130 billion in additional deposits, potentially lowering their funding costs.” said Eric.
Thank god. Because if there’s one thing that winds me up it’s the thought of banks having high funding costs. I’d hate to see their quarterly profits plunge by a couple of hundred mill.
“As a quid pro quo, the government could presumably pressure the banks to reduce lending rates relative to cash rates,” Mr Davies said.
I would to Kieran. It’s called coming to the party. Unfortunately for the banks it’s not tax deductible or can’t be spun as philanthropic.
The disparity between loans to consumers and small business is still yet to be addressed, despite the recent senate hearing into this matter recently.
Consumer saving should be in concert with fair interest rates for SMEs. This would require a holistic approach which would be an anathema to the banks. Quid Pro Quo Kieran!
Our enquiry rates at ARCF are reflecting this disparity. SMEs, even those with solid credit histories and assets, are being turned down by banks based on their industry sector – like lambs to the slaughter.
If you can’t wait for the Ombudsman and you’re in small business, try calling a few debtor finance companies. Times have changed.