David Coleman (Banks, Liberal Party) Share this | Hansard source

When those opposite were in government, they did absolutely nothing about the problems in the financial services sector. It is relevant to have a look at the personnel on the other side when they were in government. Who was the Assistant Treasurer from 14 September 2010 to 14 December 2011 and then was Minister for Financial Services and Superannuation from 14 September 2010 right through until the 2013 election? Well, it was our old friend, the Leader of the Opposition. He was, in fact, responsible for all matters related to financial services and banking for about three years under the previous government, and he did nothing to address the very significant issues we've seen in the financial services sector. By contrast, this government has done an enormous amount.

One of the first issues that was addressed was the issue of consumers getting access to justice when things go wrong. There were legitimate complaints that it was hard to get justice, hard to get compensation, because you had to take your bank to court, and that's a very expensive and difficult process. So we're fixing that through the Australian Financial Complaints Authority. There will be no lawyers and no fees—a simple way of getting these matters resolved. That will come into being about seven months from now, on 1 July next year—delivered by this government.

Another issue that's been very clear in our House economics hearings and in other places is the lack of executive accountability in the banking sector, with effectively no senior executives being held materially responsible for a whole range of different, very significant issues. And that's why the government is setting up the Banking Executive Accountability Regime, or BEAR, which will hold individual executives responsible for their conduct. It will involve fines for banks of up to $200 million if they do the wrong thing, and it will be rigorously enforced by the Australian Prudential Regulation Authority. That will be a very important initiative.

The other thing we talk about so much in the Australian banking sector is when interest rates go up, and people complain—fairly and reasonably—about why those rates have gone up, especially when they are out of step with the Reserve Bank. But the reality is that, until a few months ago, there was no regulatory review or oversight of that very important issue of competition in the setting of interest rates. That is now fixed, because the ACCC now has a team called the financial services unit, which is exclusively focused on the issue of competition in banking, particularly as it pertains to the setting of interest rates. It's going to be very interesting to see the ACCC's first report, which is due early next year on this topic, and its assessment of whether or not banks have made misleading and deceptive statements about interest rate movements, particularly earlier this year.

Another issue that this government is addressing is competition. It turns out that between 2006 and 2016 the total number of new banking licences issued in Australia for a new start-up company was one—one new licence in a decade. That's not good, because it means a lack of competition, which means more power for the big banks, which is bad for consumers. So we're fixing that as well. New rules will make it easier for people to set up a bank. That is a good thing which is going to mean more competition and more downward pressure on prices and interest rates.

Another reform that's been implemented is reform to non-monetary default. This is when someone's been paying their mortgage on time, paying the bank, but the bank steps in and finds the person in default, even though they've actually paid all of their payments on time. That's wrong. It shouldn't happen. And this year the industry has moved, after recommendations from our committee and also the Australian Small Business and Family Enterprise Ombudsman, to rule out that process for loans of up to $3 million. It will help a lot of rural businesses because this issue has affected many farmers in the country.

And there are a range of other issues on the go at the moment, including tap-and-go payments, where merchants are being forced to pay hundreds of millions of dollars of fees in the processing of those tap-and-go credit card payments. There will be more to say about that shortly.

The royal commission is not an inquisition into capitalism, as those opposite would like it to be. It will focus systemically on a range of issues, including the governance of industry super funds, because the governance of industry super funds should be about returns to members, not supporting union mates. Directors on industry super funds should be independent, and it's very important that the royal commission will examine this issue. (Time expired)

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