Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Hansard source

I thank the member for Throsby for that question because, as we were saying in the House the other day, the global financial crisis did have a fundamental impact on competition in our banking sector and it did hit the smaller lenders very hard. Of course, there is no silver bullet solution to this challenge. These are problems that will not be solved overnight. There are a variety of reforms occurring in the international banking sector which have ramifications here. The government has been working very hard to make sure that those reforms are appropriate for Australia because those reforms are very important when it comes to certainty in our financial sector.

The government is also committed to reform here domestically when it does come to banking competition. It is the best way to put downward pressure on rates and certainly the best way to assist small business and homeowners. The government has put forward a package of measures to help smaller lenders to compete with the big banks and we have put in place tough new consumer laws to crack down on unfair mortgage exit fees. There is our investment of $16 billion in AAA-rated RMBS. That is important to provide funding support to the smaller lenders. It has been the strength of our system that avoided the destruction that occurred in so many other financial systems around the world.

The one thing we know we cannot do is fracture that consensus I was talking about before. Last week we had the shadow Treasurer come out spinning out hot air about how he was going to reregulate the banks and threaten the very independence of the Reserve Bank. So we had this brain implosion last week from the shadow Treasurer and he has spent the last four or five days trying to mop it up.

See this speech in context