The details can be found at The Poll Bludger’s joint. Nelson’s down 2 points (within the moe) but no doubt that will start off another round of Costello fantasising, even if the audience for that sort of idiocy will be even less than it usually is with the Olympics and all. It’ll be as meaningless as the change in the poll, and the relatively meaningless measure itself.
Of much more interest is the new kid on the polling block, Essential Research (which btw has Labor 58-42 on the 2PP). The online poll has been mixing it up a bit with different questions. You can read all the results here, but I wanted to focus on the question on interest rates and the banks.
82% of respondents would support a law to compel the commercial banks to pass on any drop in rates by the Reserve. That should embolden the government, and send a wake up call to the banks. Incidentally, we know – contra Planet Janet – that not all the banks’ funds are sourced domestically, but on the other hand they’re making hay while the sun shines by increasing their margins in a less competitive market. Planet might remember that even Howard and Costello weren’t averse to a bit of bank bashing, but perhaps her memory is as selective as her grasp of how markets work is flimsy.
The other interesting thing to note about the big banks is that they’re very successfully reinforcing the case that interest rates are quite removed from direct government control. If Labor were cynics, they’d be hoping that the banks don’t pass on the full rate cut.
Everybody hates the banks. It’s the national sport, kicking them around. The banks know it themselves, and all their adverts try to do is make us hate them that little bit less than all the rest. Personally, I use a credit society.
As for legislation to make them pass on official rate cuts -I doubt it would be an easy Act to draw up. Wouldn’t it contravene the constitution if the government acts to limit profit?
I don’t know if it would contravene the constitution, because commercial interest rates have been regulated by the government before. It would never happen now, but I think the response is interesting for what it says about the politics of the situation. I think Labor gains if the banks present an easy target, and reinforce the disconnect between interest rates and politics, as I said.
Oh, btw, I was right about what the OO would lead with!
http://www.theaustralian.news.com.au/story/0,25197,24165653-601,00.html
I’m thinking the absolute number of PPM respondents for Brendan are getting so low, Newspoll might need to revise the MOE.
A special one just for the Locum.
Kim,
The banks are just easy targets all round – regardless of the facts. A simple look at their net interest margin and how thin it has become over the last 20 years shows how competitive the industry is. The days of even 3% nim are long gone. 1% is now the rule. The number of institutions that could no longer compete and allowed themselves to be taken over (even in Ozymandias’ credit union land) is another indication.
Try to convince (almost) any one of this, though, and you will find the takers very thin on the ground.
Full Newspoll data here.
http://www.theaustralian.news.com.au/files/newspoll-12aug.pdf
“As for legislation to make them pass on official rate cuts -I doubt it would be an easy Act to draw up. Wouldn’t it contravene the constitution if the government acts to limit profit?”
What, like levying a company tax, or putting price controls on petrol, or mandating a minimum wage?
BBB
Just a side note, isn’t Planet Janet husband a senior lawyer with the Commonwealth Bank or some such?
This Brendan death watch has been going on longer than that of the Bali bombers. The Liberal Party is not really waiting for Hamlet Costello to make up his mind, are they?
“If Labor were cynics, they’d be hoping that the banks don’t pass on the full rate cut.”
I doubt it. The punters want their governments to be in control. They know nothing and care less than nothing about the nuances of risk margins and the ups and downs of the international capital markets
Spiros,
Its not so much that “The punters want their government in control” as “The punters wanting to see their government in control”. It’s a bit of an old Yes Minister thing, but very pertinent to the governments we have at the moment.
What Kim is suggesting is that if the Banks don’t follow the RBA down, they instantly have a target on which to blame economic woe, not so much banks in particular but “The Market”, that way they can start applying increasingly restrictive commercial laws to regulate it. This is the narrative they’re playing to, look at FuelWatch and GroceryWatch, and the opposition is playing to their hand, being wedged on their key (perceived) strength, the Economy.
Yeah it’s cynical, but it’s strategically sound. Peter Beattie used to do it well, almost waiting for disasters to happen so he could go “striding in on his white charger to save the day”, but in the end only doing what should have been done in the first place.
PinkyOz
Am I the only one who hates the term ‘punters’ and all it connotes?
Adrian, no.
Adrian, it seems not, but as a muso I don’t mind it. It reminds the band that people watching have taken a gamble with thier time and money that they’ll be entertained. Which, depending on how you look at it, might make you more or less competent performing. But at least you think about it.
Re Andrew Reynolds Aug 12th, 2008 at 1:47 am
But surely the lowering of the nim has been more than offset by the huge increase in the value of loans made over the past 20 years? I mean (for example) 1% on $50 billion is a lot more than 3% on $10 billion… And then there’s the rampant charging of account-keeping and all the other fees that didn’t exist in the not-too-distant past. It’s not as thought the banks are going broke; not the big ones in Aus anyway.
Not me. I climbed in thru the back window to steal your beer.
Don’t worry FDB, while he was doing that, I was doing his girlfriend. There’s the drinkers, and there’s the thinkers…