Why should Aussie banks funding costs be high?

Comments on Bill Evens “WEEKEND ECONOMIST: Clean bill of health?”, 26/09/2009, http://www.businessspectator.com.au/bs.nsf/Article/WEEKEND-ECONOMIST-Clean-bill-of-health-pd20090925-W8AWY?OpenDocument

One point that I find it hard to understand is that why the wide funding spreads in the global markets should have such a strong hold on Australian banks, given the government guarantee and the ability of Australian banks to raise capital fairly easily.

Bill, can you shed some light on that?

On official interest rate, it may be prudent for RBA to raise it symbolically once fairly early to send a signal to prevent unnecessary bubbles in some areas.

However, ultimately, it is preferable to have low interest rates and reducing the government fiscal stimulus to have the economy more efficient. The government has an unfair advantage in competing with the private sector by forcing the interest rate up or force the hand of the RBA in keeping the rate low for a longer time.