Garth Hamilton (Groom, Liberal National Party) Share this | Hansard source

by leave—I thank the chair of the committee, the member for Fraser. This was a very broad-ranging report that we engaged in, and his work in directing us towards an outcome required some work. I thank him for his collegiate approach and thank him very much for coming to Toowoomba, the home of Australia's ninth-largest bank—Heritage, now People First. I thank the secretariat for all their hard work, particularly Lachlan Wilson, and I recall the memory of Samantha Mannette in her contributions, as was very well done by the chair.

At a time when Australians and Australian businesses are experiencing cost-of-living pressures, the findings of this inquiry are more critical than ever before. Improvements to Australia's competitive environment, such as more efficient supply chains, reduced regulatory barriers, appropriate regulatory frameworks and flexible employment arrangements, may help to address high inflation and falling productivity. I commend the chair and his willingness to engage with the smaller and customer owned banks—a sector very important to me. It is very pleasing to see bipartisan and cross-party support in this area, and I believe it's already been very beneficial.

The issue of a regulatory grid was regularly raised during the inquiry as a practical step the government could take to enable more competition in the banking sector where smaller banks simply do not carry the overheads of bigger banks and are required to navigate blindly through heavy regulatory change. We heard time and again how this step had been successfully taken overseas without detriment to the usual political process of regulatory improvement and reform. I think the fact that the government has decided to take the initiative and move ahead with this issue should serve as a point of pride to the chair and the committee. Our work together delivered results even before we laid down our tools.

From the evidence provided, the recommendation that banks should clearly notify retail deposit holders of changes to their interest rates and changes to the eligibility requirements for bonus interest rates must be pursued and supported by government, opposition and the crossbench in the future. That this practice exists and was widely covered demonstrates that an asymmetry of information is being exploited to the detriment of Australians, and there is no justification for that to be allowed to continue. On funding costs, the recommendation that APRA examine the suitability of macroprudential regulation for medium and smaller banks, particularly the capital holding requirements, was well supported in testimony that was given.

Given the success of the committee in reaching bipartisan support for previously mentioned sensible recommendations, it was my inclination to keep the focus of the committee's report there. These are very good steps. They will make tangible improvement to competition in our banking sector and they deserve the spotlight. I have thus chosen to provide not just any recommendations but, rather, additional comments that I feel are relevant. I note that all of these points are based on evidence provided to the committee.

In seeking improvements to competition and economic dynamism, it's important to understand the impact of declining productivity and significant industrial relations reform. Productivity has fallen by 5.4 per cent in the past 21 months—the largest fall we've ever recorded. The Business Council of Australia said:

There are many underlying reasons for this loss of economic dynamism. They include … increased uncertainty (including over government policy), dwindling foreign investment … a rigid and heavily regulated labour market, a heavy burden of tax and regulation …

On all of these points, there is a role for government to play. However, following the government's second budget, the Parliamentary Library researchers could not find a single substantive program within the budget papers to boost economic productive capacity. The report said, 'There's little detail on how government is going to achieve a boost to productivity growth.' A year on, a year worse off, the government again has the opportunity to address that with its third budget.

On industrial relations, the committee heard evidence, including from the Minerals Council of Australia, on the negative impact the government's IR reforms will have on productivity, competition and economic growth. Given the role that this industry had in underwriting the government's last budget, these concerns should be taken seriously. The lack of consultation about these laws that the Minerals Council described was alarming. Australia needs a modern workplace relations system that delivers a safety net for workers, recognises the shared interests of managers and workers in the enterprise's success and gives all enterprises the agility they need to compete and succeed. Centralising decision-making to the Fair Work Commission and handing power to unrepresentative unions will not fix this.

Where to next? A good committee report leads the parliament towards its next field of opportunity, and I think that is one of the best aspects of this particular report. Australia has concentrated markets in multiple industries, particularly in banking. According to Forbes, our four major banks are among the world's largest banks by market capitalisation and are also some of the most profitable in the world. Pursuing further competition in our banking sector means pursuing corporate diversity. Regulators should be held responsible for ensuring that a wide range of corporate providers are available to consumers, including cooperatives and mutuals. Competition policy should support the inclusion of these options going forward. Further taxation settings for mutuals should reflect the value that they provide to the greater society.

Again, I commend the chair on his excellent leadership through this wide-ranging report. I'm very happy to see the recommendations come through and receive support across the party. I do believe they will play a part in delivering the better competition and better prices that they set out to achieve.

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