Govt must ensure rate cut passed on: Abbott

3 Oct 2012, 2:28 pm   -   Source: AAP
PM Julia Gillard has called on banks to pass on the latest cut in the official cash rate. (AAP)

PM Julia Gillard has called on banks to pass on the latest cut in the official cash rate. (AAP)

Opposition Leader Tony Abbott says the prime minister and treasurer must ensure the latest Reserve Bank interest rate cut is passed on by the retail banks.

Opposition Leader Tony Abbott says the federal government must ensure the central bank's latest interest rate cut is passed on in full by the retail banks.

The Reserve Bank of Australia (RBA) on Tuesday unexpectedly cut the cash rate by 25 basis points to 3.25 per cent.

So far the Bank of Queensland has passed on only 20 basis points of the reduction to its variable loan rate customers and the major banks are still reviewing their rates.

"The challenge for this prime minister and this treasurer is to ensure that the cut in official interest rates is passed on to people who are doing it tough," Mr Abbott told reporters in Melbourne on Wednesday.

He said on 60 separate occasions Treasurer Wayne Swan had "jawboned" the banks about passing on rate reductions in full, and that on more than 50 occasions he was ignored.

"This is a government that is not taken seriously in the way that last coalition government was," Mr Abbott said.

He said under former coalition prime minister John Howard and treasurer Peter Costello official rate cuts were passed on in full, bar one time.

"The Reserve Bank's position is that our economy is soft," Mr Abbott said.

"The Reserve Bank cut official interest rates yesterday because it wants that cut passed on, we want that cut passed, and if Treasurer Swan had any credibility he would ensure that that happens."

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