Big banks profit from cost of living pain
Big banks profit from cost of living pain)

While most of us are being hit hard by the biggest cost of  living crisis in a generation, Australia’s “big four” banks—Commonwealth, Westpac, ANZ and NAB—have had a record-breaking start to the financial year, posting a combined half-year profit of $17.1 billion. That’s a 19 percent increase from the equivalent period in 2021, and $1.3 billion more than the previous record of $15.8 billion in 2015.

To put it in perspective, the big four made more in net profit in the last six months of 2022 than the Labor government plans to spend on cost of living relief over the next four years ($14.6 billion), or that it is proposing to invest in its “housing future fund” to build new social and affordable housing ($10 billion).

The banks are raking it in, not in spite of the cost of living crisis, but because of it. One way they make such eye-watering sums is by charging higher interest rates on loans than they pay on deposits—the wider the margin, the juicier the profit. That’s why the banks are always so quick to pass Reserve Bank interest rate rises on to borrowers but much more circumspect about lifting rates on deposits.

Rate hikes to date have meant that, as of December last year, nearly a quarter of mortgage holders (more than a million people) were at risk of “mortgage stress”, in which more than 30 percent of a household’s pre-tax income is spent on mortgage payments. Back then the average monthly repayment on a $500,000 loan was up by $900 compared to a year earlier. With further interest rate rises since, this figure will only have increased.

What are the bankers doing with their windfall? Not improving their service, that’s for sure. According to figures from the Financial Sector Union, between 2017 and 2022 the number of bank branches around Australia went from 5,694 to 4,014—a 30 percent fall.

One thing they’ve been spending their money on is the inflated pay packets of their CEOs. The CEO of Commonwealth Bank, Matt Comyn, pocketed almost $7 million last year, Westpac’s Peter King took home $5 million, and NAB CEO Ross McEwan got $6.3 million.

Do the bankers feel sympathy for the millions of Australians who are experiencing the financial strain of a cost of living crisis they’re profiting from? Of course not. When asked in a recent interview with ABC Radio National’s Patricia Karvelas whether he’d support a rise in the minimum wage commensurate with the rate of inflation, McEwan said that instead of a raise, those workers should “start looking around” for a higher paying job.

As for the rest of us, we might consider the benefits of a world in which banking CEOs like McEwan had to look around for something useful to do, and the immense transfer of wealth from the poor to the rich that they preside over could be reversed.

Read more
Dan’s destruction of public housing
Colleen Bolger

Daniel Andrews, in one of his last acts as Victorian premier, announced that Melbourne’s 44 public housing towers will be demolished. In an audacious giveaway to developers, the sites will be opened up to private development.

Ingham’s workers win higher wages 
Harvey Menadue, Kalesh Govender and Danica Scott

“Five! Four! Three! Two! One! Zero!”

Melbourne Uni staff step up strike action
Another Melbourne Uni strike
Danica Cheesley

Two record-breaking union meetings at Melbourne University have voted overwhelmingly for another week-long strike, starting on 2 October.

Refugee women walk for freedom
Refugee women walk for freedom
Renee Nayef 

Refugee women desperate for visas are walking 650km from the office of Immigration Minister Andrew Giles in Melbourne to Parliament House in Canberra.

Jacinta Price and the far right
Sarah Garnham

Jacinta Nampijinpa Price could well become as synonymous with the far right as Pauline Hanson. Four weeks out from the referendum on the Voice, she cemented her position as one of Australia’s leading white supremacists with her comments at the National Press Club about how colonisation has been a wonderful thing for Aboriginal people. She railed against “separatism” (any acknowledgement that Aboriginal people are oppressed) and implored people to recognise that Aboriginal disadvantage is not due to racism but is the result of something “much closer to home”.

Andrews was no socialist
Mick Armstrong

Dan Andrews, who has just resigned after nine years as Victorian premier, was probably the most controversial Labor leader since Gough Whitlam or indeed Jack Lang. Andrews was detested by the right as “Dictator Dan”, a man out to destroy all the “freedoms” so beloved by arch reactionaries and libertarians, such as the right of business owners to put profits above basic health measures.