farmdoc's blog post number 89

In 1991 the first tranche of the Commonwealth Bank of Australia [CBA] was sold, starting a massive sell-off to the private sector of longstanding and cherished public assets. Established in 1911 the CBA, the second largest of Australia’s banks, was once nicknamed the People’s Bank. But not since full privatisation in 1996. Last Friday the CBA announced that due to the continued increasing cost of funds, it was raising its loan interest rates though the Reserve Bank of Australia last raised the official rate on 5 March 2008. Other major banks have raised their loan rates in the past few days, too. It’s obvious they place the interests of their shareholders above those of their customers. Do they care that the latest interest hike is hurting their customers? No. They ignore the effect of rising petrol, food, utilities etc, and gouge as much and as fast as possible; more so since the increasing credit cost has hit non-bank mortgage lenders. I reckon that if the government still owned the CBA, its rates would not be rising so fast, and the private banks would stay in line. But we’ll never know. By the way, the CBA’s profit in the second half of 1997? A mere A$2.4b. And the Prime Minister in 1991? One R J L Hawke – of the ALP: the People’s Party.