Federal Treasurer Wayne Swan is “really optimistic” about Australia’s future and says the nation is well placed to thrive with its links to the Asian region.
“I am really optimistic about the future of this country,” Mr Swan told a business function in Sydney on Monday.
“We are in the right place in the world at the right time.
“We are in the Asian century, and we are ideally located to prosper in this part of the world.”
Mr Swan reiterated his warning that the major banks should not lift lending rates higher than increases to the overnight cash rate by the Reserve Bank of Australia (RBA).
Westpac has said lending rates could outpace rises in the cash rate due to pressures on wholesale funding, and the bank’s competitors are likely to match any such move.
The central bank lifted the cash rate by 25 basis points last week to 3.25 per cent, its first upward movement on interest rates in 19 months.
Debt futures markets are pricing rises of 25 basis points to the cash rate at each of the next four meetings of the RBA board.
“My call at the moment is there is no justification for the major banks to be moving up and above the Reserve Bank,” Mr Swan said on Monday.
Mr Swan said the federal government guaranteed deposits with domestic financial institutions to ensure a flow of credit to Australians and the economy as the global financial crisis deepened.
In October 2008, the federal government fully guaranteed deposits held at authorised Australian deposit institutions for three years.
“The bank guarantee has been absolutely essential in ensuring that deposit taking institutions would raise funding at a time when commercial financial markets were in a situation of dislocation,” he said.