Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Deregulation, Competition Policy and Sustainable Cities) Share this | Link to this | Hansard source

Prime Minister Kevin Rudd’s ignorance about and lack of interest in the challenges faced by small business trying to access affordable finance was glaringly obvious under the bright lights of his favourite TV spot on Seven’s Sunrise on Friday. When asked about the Reserve Bank analysis suggesting banks had increased interest rates by a quarter of a percent more than the movement in funding costs would otherwise justify, the Prime Minister falsely claimed that he had done ‘practical things’ and ‘could do more about it’. Rather than take the kind of strong stand former Treasurer Peter Costello took in actively opposing opportunistic rate rises, the Rudd government’s detached indifference has given the banks the nod on excessive interest rate rises. For small businesses, the Rudd Labor government has not lifted a finger or uttered a word when rate reductions were not fully passed on when rates were heading down and when rises have been greater than the official rate increases when rates have been heading up. Both these phenomena have been forced on small business borrowers, and the Prime Minister was caught out, having no answers and no idea about the problem, on Sunrise on Friday.

The Prime Minister’s explanations of the action he claims to have taken to help small business facing excessive interest rate rises and bank charges are so laughable and so disconnected from the world of small business they are insulting, taking him from ‘Prime Minister Blah Blah’ to ‘Prime Minister Ha Ha’. The $16 billion of help Mr Rudd mentioned as support for small lenders involved the Australian Office of Financial Management, the AOFM, investing in residential mortgage backed securities designed to support access to credit for residential purposes and has no direct effect on access for small businesses. The Treasurer was kind enough to try and elaborate upon that in his direction with regard to the purchase of those securities, when in the official direction he makes no mention of small business. In his commentary he hopes, almost pleads, that those benefiting from that protection and assistance might have an eye to the needs of small business, but no direct consequence from the action.

The Prime Minister went on to claim that changes in consumer credit law were going to make a difference. This is a simply spurious claim, as the main purpose is to transfer responsibility for consumer protection to the states. The government’s own explanatory memorandum for the bill makes no such claim as the Prime Minister made. The Prime Minister’s claim that it enables the regulators to crack down on gouging across the financial sector is absolutely false and not backed by any of the material supporting that measure. His final claim relating to small businesses was:

The best thing customers can do is actually walk with their feet, and we have brought in bank switching arrangements which enable you to do that without huge walls of resistance now from the banks.

Again, that is a completely false and misleading statement, in that the bank switching arrangement the government claims credit for relates to deposits not to loans, not to borrowers, and it offers no assistance to credit-worthy small businesses experiencing difficulty accessing affordable finance. (Time expired)