Jenny Ware (Hughes, Liberal Party) Share this | Hansard source

I rise to speak on this motion with regard to the APRA requirements for smaller banks. I will start by commending the member for Groom for bringing this motion.

The regulation that is proposed is a bit complex, so I'm going to attempt to bring it down to a simpler level. Essentially, in November last year the Australian Prudential Regulation Authority, APRA, announced it was investigating tighter liquidity and capital requirements for smaller authorised deposit-taking institutions. When it made this announcement, however, APRA did not provide any evidence to justify the change. It seems that APRA had failed to consult with industry, and it provided no evidence to support the change in policy. So, straightaway, when a regulator with the power of APRA conducts an inquiry and there's a lack of consultation in that way, it does raise serious questions. In Australia we have a banking sector that is already subject to considerable prudential regulation, and I think overall it's intelligent in its approach to ensuring the banking sector's resilience to financial market stress. These were the sorts of reasons that were put forward, fairly broadly, as to why these changes to liquidity and things were required.

What this is actually about is a power imbalance between our big four banks and our smaller community banks and other mutual societies and organisations. It is not good when we are seeing competition eroded between these organisations. The ones who suffer in the end are, of course, the Australian consumers. We on this side believe strongly in the powers of markets, in the power of entrepreneurial approaches to everything, including the financial sector. In particular, we believe in competition. The changes that have been proposed will result in less competition, less access to capital for consumers and, overall, higher costs for consumers.

I think we need first of all to look at the very important role that smaller banks and financial organisations play in our community. Because of their very nature, community banks tend to channel most of their loans to the neighbourhoods where their depositors live and work, helping to keep communities vibrant and growing. We heard the member for Casey talk about the number of banks and organisations within his electorate that contribute significantly to all of the activities within the local community, and I note in mine, in particular, their support for local sport and local charities. I think that community banks have a real presence in the community. One of the biggest complaints I receive in my office is about bank closures. But community banks, because they do have a physical presence—they have tellers there, they have real people—provide invaluable assistance to elderly people and people with a disability who may, for example, be unable to access internet banking because they're vision impaired. They may be people with a disability. They may be people that simply do not have internet access; there are still plenty of those in Australia. These are the sorts of very direct services that these community banks provide, and that should be encouraged.

Community banks also provide very important competition, particularly within the housing sector. At a time when the bank of mum and dad has become the sixth-biggest lender in Australia, we are approaching a situation where whether or not you end up owning a home will depend upon the circumstances of your birth. There is a role, therefore, for these smaller banks to assist, often in circumstances where the larger banks will refuse first home buyers. So it is extremely important to our side that we maintain the strength and integrity of these smaller banks. (Time expired)

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