As Australian interest rates inch higher, the Finance Sector Union said more attention needs to be paid to the size of the debt on which interest is charged.

While banks are becoming more wary of deviating from RBA decisions, they plough on with aggressive sales techniques to load Australians up with more debt.  Last year, Australians’ personal debt exceeded GDP for the first time.

“Personal debt is like an iceberg.  Most of it is below the surface,” said FSU National Secretary Leon Carter.  “Banks want us to look only at the top—the rates they charge.  But families are drowning in more debt than ever thanks to banks unsustainable sales targets.

“These targets go up every year, no matter what.  Interest rates continuing to rise will only make this crisis worse.”

Mr Carter pointed to news this week that a New South Wales credit counselling agency handled 3000 more calls over the last year.  One of its solicitors said, “We are now facing a wall of calls and there are simply not enough people, not enough lines, to help.”

The banks—despite generating almost $10 billion in profit last year—provide no financial support for the centre struggling to help Australians with mounting debt problems.

“As banks force more debt onto more people, interest rate rises will claim more victims,” Mr Carter said.  “Yet finance workers are alone in sounding the alarm about aggressive debt pushing, even though many consumers can’t afford the debt banks keep jacking up.”

The FSU said bank workers’ salaries need to be de-linked from meeting sales targets, and that action from the Rudd Government would be welcome.

“If Kevin Rudd wants to show financial leadership to the G20, reining in debt-pushing by banks would be a very good place to start,” Mr Carter said.

ENDS
Media: Leanne Shingles, 0423.821.773
Spokesperson: Leon Carter, 0409.946.597