The time is fast approaching when the Labor Government will have to do more than just go tut-tut when the banks move to protect their profit margins by increasing interest rates when all around them other companies and individuals are suffering from this global recession. There is no doubt about it; the public will soon turn on Treasurer Wayne Swan and Prime Minister Kevin Rudd for being all talk and no action.
The Federal Government certainly has the power to limit the profits the banks make. All it takes is a modest return to some of the regulatory regimes overturned by the Hawke and Keating Labor Governments. That Messrs Swan and Rudd have not done that already was to avoid the risk of Australian financial institutions getting in to the same kind of mess as their overseas peers. Now that the danger of such collapses here has passed, giving banks one up the bracket has become possible.
And the politicians will understand the necessity of doing so too. There is nothing like fear of a little electoral unpopularity to concentrate the mind.