Chalmers: banks should pass on rate hikes to savers

Treasurer Jim Chalmers will tell banks directly that he expects interest rate rises to get passed on to savers.

“For those people who live off savings, they've been doing it tough for some time now, it's time they got a bit of relief,” he said during a doorstop interview at the press gallery in Canberra on Tuesday.

“I think it's really disappointing that some banks are not passing on these increases in interest rates to savers.

"You know savers have been the principal victims of interest rates when they were incredibly low and they should be the beneficiaries of rising interest rates. There needs to be some positives out of this and for savers they need and deserve higher interest rates on their savings.”

Chalmers was asked whether Reserve Bank Governor Philip Lowe should resign amid claims by some economists that he misled borrowers.

“My focus isn't on the RBA,” he replied.

“I don't think this is a time to take potshots at Lowe. My responsibility is to make the RBA’s job as easy as possible. That means not splashing cash around unnecessarily. It means dealing with the supply side issues in the economy where we can so that we make the job of the RBA easier, not harder.”

Chalmers said there was a reason for the RBA review.

“I want our central bank to be the best in the world to have the best set of institutional arrangements,” he said.

“That's not about taking potshots at anyone. It's about making sure going forward that we've got the best monetary policy setting in the world.

“The RBA Governor himself multiple times now has been quite upfront about the language that he's used in the past to describe the future movement of interest rates.

“He has said publicly that the circumstances changed faster than the RBA anticipated. These are not decisions taken by the government. They are decisions taken by an independent reserve bank and they can explain and defend their own decisions.”