Treasurer urges ACCC to look into deposit rates

The Federal Treasurer and member for Rankin, Jim Chalmers MP, has asked the Australian Competition & Consumer Commission (ACCC) to explore whether savers are being treated “fairly” by the banks.

Following reports that Mr Chalmers had requested for the ACCC to take “a closer look” into the matter (as originally reported by the Australian Financial Review), the Treasury confirmed that this was the case to Mortgage Business.

In a statement provided to Mortgage Business, Mr Chalmers said: “This is an issue I’ve asked the ACCC to take a closer look at this year. 

“Banks should treat their customers fairly when it comes to savings accounts.               

“People who rely on their savings bore the brunt of very low rates in the past and they should see the benefits of higher rates now — it should be the silver lining in all of this.”

The matter has come to the fore given that the official cash rate has risen by 300 basis points (bps) in nine months, and while banks have been hiking mortgage rates as the cash rate increases, savings rates have not necessarily risen in tandem.

As such, there is now a growing disparity between savings rates across the financial institutions — with some of the major banks’ online/e-saver accounts still starting from under 1 per cent, while others are over 4 per cent.

According to financial comparison website RateCity.com.au, around 90 banks have increased at least one ongoing savings rate by less than the 3 percentage point increase from the Reserve Bank of Australia (RBA), with just 17 banks now offering ongoing savings rates of 4 per cent and over.

Mr Chalmers added that those with savings deposits should “look around for a better offer” if their bank “isn’t giving [them] a fair deal”.

“With the Consumer Data Right rolled out across the banking sector, it’s easier than ever to find the best deal for you,” he said.

The request from Treasury to the ACCC is not unprecedented. Indeed, in 2019 the former Treasurer Josh Frydenberg asked the watchdog to examine the big four’s home loan pricing behaviour after he blasted them for failing to pass on the RBA’s full 25-bp cut to the cash rate in October 2019.

The resulting report, the Home Loan Price Inquiry, was released in 2020 and put forward four recommendations that could make mortgages more transparent and reduce barriers to switching.

These included: 

• Having lenders prompt borrowers with variable rate loans originated more than three years ago to contact their broker or lender to review their rate;
• Creating a standardised discharge authority form;
• Limiting discharges to 10 business days; and
• Continued monitoring of competition and prices in the home loan market.

However, no government response was ever issued and the Albanese government is not beholden to respond to the previous administration’s reports and inquiries.

[Related: What’s taking the government so long to fix mortgages?]