Craig Thomson (Dobell, Australian Labor Party) Share this | Hansard source

When I seconded this motion I did so to allow debate on what is a very important issue. While I do not agree with the Banking Amendment (Delivering Essential Financial Services) Bill 2010, I think it is important that we have this debate here tonight. It is for that reason that I seconded the motion.

One of the things that distinguishes this bill which the Greens have put forward from the nine-point plan which the opposition have put forward is that at least the Greens have taken some time to sit down and think about what the issues and problems are and how to address them. From the shadow Treasurer we got a nine-point thought bubble, which went through what he could think up on the day. In fact, he did not even think it up on the day; he took a couple of days to come up with those nine points. He was all over the place on the first day. He got a little bit better as time went on, but he was still all over the place trying to exploit this issue for cheap political gain. He is not thinking about, in any sense, the long-term consequences of what he is actually proposing. I acknowledge that that is in stark contrast to this bill that has been put forward with some proposals for the right intention.

This government has been looking at and acting on competition in the banking industry for some time. I was chairing an inquiry into banking competition in 2008 when the global financial crisis came. Of course that changed a whole range of issues that this country and the international economies had to face. We were talking then about bank survival. One of the things that we need to recognise is that Australia, through its regulations, was able to come through that banking crisis with its banks intact and still AAA rated. By the end of the global financial crisis there were only seven banks in the world in that position, and four of them were Australian. That is worth acknowledging at the start.

The government also looked at ways in which we could come up with competition, and the Treasurer took up those recommendations. There was one which was most important. What we saw in the nineties, through securitisation, was cheaper loans being made available through second-tier lenders. Once the global financial crisis came, securitisation and the wholesale market totally tightened up. This government invested over $16 billion in AAA-rated RMBSs to make sure that they were available for those second-tier lenders to be able to continue in the market and play some role in competition, because at the end of the day what is going to drive cheaper interest rates and better service for consumers is competition in this industry.

It is not about regulating to such a degree that competition is taken out. We need to provide the right environment—and some of that involves some regulation—for competition to flourish and we have been able to do that in some areas. For example, this bill goes to ATM fees. The reforms that we put in place in ATM fees have seen a reduction of over $120 million in fees taken from consumers. That has come about through regulation and also by making sure that there is competition in ATM fees, and it is important that we make sure that that is able to continue.

We also need to recognise that there are still global difficulties with wholesale funding, and they will continue while the global economy is in the state it is. The Treasurer has announced that a second tranche of reforms is coming. Those reforms will be aimed squarely at putting Australian consumers in a better position, to make sure they can take advantage of competition as it emerges post the global financial crisis. That is the best thing that we can do. We need to make sure that switching is, and continues to be, an option. Sometimes there is reference to the number of people who have switched. The reforms that came through last time ensured that switching was an option and that those who did not switch were given better conditions by the bank they stayed with.

This is an important debate that we needed to have, and I am glad that we have had the opportunity to have this debate here today.

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