Federal political leaders are urging retail banks to pass on the latest official interest rate cut in full, as new economic data justifies the central bank's surprise decision at its monthly board meeting.
So far, none of the four major banks - ANZ Bank, Commonwealth Bank, National Australia Bank and Westpac - have followed Tuesday's 25 basis point cut by the Reserve Bank of Australia (RBA).
It would reduce monthly repayments on an average $300,000 variable rate mortgage by around $47 if the cut was passed on in full.
Prime Minister Julia Gillard says she wants to see households receive the benefit from this latest rate reduction.
"I certainly believe that banks should be passing on the interest rate reduction from yesterday," Ms Gillard told reporters in Launceston on Wednesday.
Treasurer Wayne Swan said the banks should not keep any of this rate cut back, while shadow treasurer Joe Hockey said the banks would have to prove they have serious funding pressures not to pass on the cut in full.
"The Reserve Bank said they do not ... there's no excuse," Mr Hockey told ABC radio.
In Tuesday's statement, RBA governor Glenn Stevens said Australian banks had no difficulty accessing funding.
Opposition Leader Tony Abbott said the challenge for the prime minister and treasurer was to ensure the rate cut was passed on, noting that on 60 previous occasions Mr Swan had "jawboned" the banks about passing on rate reductions in full, and on more than 50 occasions he had been ignored.
"This is a government that is not taken seriously in the way that the last coalition government was," Mr Abbott told reporters in Melbourne.
Mr Stevens pointed to international developments, a significant drop in commodity prices and a declining terms of trade for the rate decision.
Mr Abbott went one further, blaming the government's "bad policy" for bringing a premature end to the mining boom with the mining tax.
Ms Gillard said this was a "nonsense" remark and it was "wrong and inappropriate" to be talking the economy down.
She said the economy would grow at about trend or three per cent in the coming year, and that the investment and production peaks of the resources boom were still "in front of us".
New data showed the trade deficit ballooned to just over $2 billion in August after the July deficit was revised sharply to $1.5 billion from the $556 million previously announced.
The biggest monthly deficit since March 2008 was three times the size expected by economists, and was the result of a three per cent drop in exports and a one per cent fall in imports.
RBC Capital Markets senior economist Su-Lin Ong said the size of deficits in July and August were a little surprising, even if the direction was not.
"This trend appears well entrenched ... export income is easing and this will underpin lower national income, wealth, and expenditure," Ms Ong said, adding that it supports further RBA cuts.
Other data released on Wednesday showed new home sales at a 15-year low and the services sector suffering its eighth consecutive month of contraction.