Consumers have choices over home loans: English

5. Hon DAVID CUNLIFFE (Labour-New Lynn) to the Minister of Finance: Does he stand by his statement that "We made it clear right through with the banks that with taxpayers supporting them and their depositors and their overseas borrowing, we expect that they will give borrowers a fair go."?

Hon BILL ENGLISH (Minister of Finance) : Yes.

Hon David Cunliffe: Why, then, did his Government block its own MPs' proposal for a Finance and Expenditure Committee inquiry into pass-through of official cash rate cuts to short-term interest rates, having simultaneously criticised the major banks for failing to pass through cuts and appealed to the Reserve Bank to take action?

Hon BILL ENGLISH: Our top priority is that banks keep lending, because when banks stop lending people lose jobs. In respect of the relationship of the short-term cash rate and the overnight cash rate, as we have said many times, customers of banks have the opportunity to choose lower rates than the floating rate, being the fixed 6-month and 1-year mortgage rates. I might say that when customers make that choice it will have a much bigger effect on the banks than a meeting of Opposition members in a phone box with all their supporters.