Australian banks shift charges from consumers to small business
Australian banks charged $11.3 billion in fee revenue in 2011, with a 7 percent drop from households but a 5.5 percent jump on businesses.
This was according to a report released by the Reserve Bank of Australia, which showed Australian banks charging an extra A$100 million in total fees last year.
The report indicated that households paid $4 billion in fees last year, down from $4.3 billion the year before.
Fees charged on deposit accounts fell 13.3 per cent, providing the biggest savings to households.
This category included a 42 per cent fall in "exception fees", which include charges for automatic debits where there are insufficient funds in accounts along with similar penalties. There was also an 11.3 per cent drop in home-loan fees, driven by the ban on exit fees and lower service fees on home loans.
But credit card fees continued to increase, up 4 per cent, with households paying $1.3 billion in credit card fees last year, which is a jump of $50 million.The Australian Bankers' Association said most fees were paid by "wealthier households" - which meant low-income earners were paying less than average.
The RBA also reported that businesses paid a hefty $7.3 billion in bank fees, up from $6.9 billion previously.
The Council of Small Business Australia said the higher fees levied on businesses added to conditions that were pushing some small businesses to the brink.
"We've got wages going up, rents going up, power going up and bank fees going up - it makes it very difficult, " said the council's executive director, Peter Strong.
"Of course there is the extra cost side of it, which as a small business they have to pass on to the customer, but there is also the extra administration time involved,"he added.
ABA chief Steven Muchenberg said small businesses paid 56 per cent of bank fees and large companies 44 per cent.
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