Joe Hockey is right that Friday’s unprompted rate rise from the Commonwealth Bank is the Government’s fault — though not, unfortunately, for the reason he suggests. It has nothing to do with this Government’s deficit (although the impact of other governments’ much higher deficits might be another matter), and a lot to do with the remarkable concentration that has occurred in the Australian banking sector over the last 18 months.

Since the financial crisis first became apparent, the Government has explicitly put competition second to the need for stability within the Australian financial sector, waving through the merger of two of the five largest banks in Westpac and St George, and acquiescing in the Commonwealth’s rescue-purchase of Bankwest. The consolidation has come at a time when non-bank mortgage lenders and regional banks have either been driven from the market or badly bruised by the financial crisis, magnifying the damaging anti-competitive effects of the dominance of the Big Four.

Once competition is lost in Australian markets, it is awfully hard to regain. The ACCC has no divestiture power, so even when we are over the impacts of the financial crisis, we will not be able to regain even the limited degree of competition that applied until 2008. The only sensible course of action for most consumers is to buy bank shares, and get at least some benefit from the gouging, exploitation and bastardry that our banks can get away with.

But that’s no help to small businesses that can’t get loans, or face usurious interest rates when they do, or exporters, who face a punishingly high Australian dollar courtesy of our interest rates. Or, for that matter, to the workers who depend on them.