The ongoing debate about interest rates continues to rage, with Assistant Treasurer Bill Shorten recently stating that there’s no guarantee rates will go down as a result of new government legislation to tighten the reins on Aussie banks.
Speaking on Sky News Australia, Shorten said that while the banking reform package would put downward pressure on interest rates, “No one can guarantee that interest rates will go down, because partly they’re set by the Reserve Bank of Australia and there are always plenty of factors coming into play.”
The somewhat controversial reforms, including the abolition of mortgage exit fees and a crackdown on bank rate movements, are intended to encourage competition in the banking sector. A move Treasurer Wayne Swan believes will, “ensure that interest rates are lower over time.”
Swan says the wider community has shown support for the reform measures, which Shorten says are an attempt to “improve liquidity in the market.”
Whether or not the move will enhance competition has been a bone of contention among industry experts and many finance providers, who suggest it could actually have the opposite effect. For mortgage holders, it’s a case of wait and see what the coming year brings.
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