The Commonwealth Bank shows we are not all in this together
Posted by Bill, June 14th, 2009 - under ACTU, ALP, Australian Labor Party, Australian politics, Banking unions, Banks, Capitalism, Fighting back, Finance Sector Union, Interest rates, Kevin Rudd, Labor Party, Stimulus package, Strikes.
The Commonwealth Bank has raised its home loan interest rates 0.1 percent.
It’s only a very small interest rate rise, but it shows we are not all in this together.
For the Commonwealth, it is supposedly a response to the increased cost of borrowing.
Now remember, this is one of the banks which didn’t pass on the last Reserve Bank cut to customers in full.
Other banks will probably follow. They have a nudge/wink relationship. One Bank leads and the others follow.
Maybe they will listen to the Prime Minister and not increase their rates.
But Rudd’s call – please Mr Micawber, don’t take away more money - is the sigh of the powerless, more about spin and giving the impression of doing something than actually doing anything.
Shop around was Rudd Labor’s advice. Yes, move from the Commonwealth at an exorbitant cost to one of the other Big Four banks, all of whom already charge slightly more than the Commonwealth. Some choice.
The banks are doing what banks and all other big businesses do – putting profit before people. Kevin Rudd is in Government to manage that process.
Since that is your raison d’etre, Kevin, mate, why are you surprised when a bank puts profit first?
You aren’t surprised at all. You just have to feign mock outrage and then let them get away with it, like you did when they didn’t pass on the full rate cut last time.
The Commonwealth Bank has the money to absorb increase costs and pay it workers much more.
In the first half of this financial year it made $2.5 bn profit (an increase of 9 percent over the previous comparison period). Why not use some of that $2.5 bn to cushion borrowing costs? To pay more wages?
Ah, that would impinge on the bank’s profit rate. And that is inviolate, isn’t it? Profit before people.
The Commonwealth Bank is undermining Government policy, which is to increase aggregate demand. The Government says it is powerless.
This of course is not technically true.
But Labor won’t attack the logic of profit. It is managing the system in the interests of the likes of the Commonwealth Bank.
So Rudd and Swann can talk all they like about us all being in this together, but in fact every recession we have ever had shows it is workers who bear the burden of the crisis, not bosses.
Profit is sacrosanct. So Governments, bosses and most unions and their members put profit making before anything else. What’s good for profit is good for us all seems to be the mantra.
Until the crises of capitalism show us differently.
Let’s look at the Commonwealth bank scorecard for us all being in this together.
The Bank so far has refused to pass on all the last RBA cut and it has now increased its home loan rate. Home owners are apparently not in this togetherness bed with the Commonwealth Bank.
And which Bank is cutting the real wages of its staff? The Commonwealth. I have written on this wage cutting before on this site.
The Bank has offered a pay increase of 1.5 per cent to staff who earn below $100,000. This is well below the inflation rate and is a real wage cut.
So when Rudd and the bosses claim we are all in this together, the actions of the Commonwealth Bank in attacking its workforce and working class borrowers show that for the lie it is.
What can be done? In South Africa unions are threatening to strike if their Central Bank doesn’t cut interest rates to stimulate the economy.
It’s a good pointer for what the ACTU should do – strike to force the RBA to cut rates and to force the bosses to pay real wage increases.
As part of a real wage campaign, Commonwealth Bank staff could refuse to process the increase.
It’s all about profit. Cut off the flow of profit to the Bank and they’ll quickly begin to negotiate with you. Do nothing and they’ll steamroll you with wage cuts and the rest of us with rate increases.