Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Assistant Treasurer and Minister for Financial Services and Superannuation. Why is certainty around banking regulation important and what is the government’s response to comments about proposed reforms in this area?

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I thank the member for Oxley for his question. He has shown a great deal of interest over his time in this place in improving services and certainty for consumers in the financial sector. Certainty is important because the consequences of getting certainty wrong in banking regulation can have catastrophic consequences for all Australians, as I am sure people opposite understand.

The big four banks in Australia—and many of their other colleagues—go overseas to raise a lot of their capital. Members opposite may be interested to know that that is in the order of 40 per cent of all the capital that is raised. What that means is that 40 per cent of an average Australian’s mortgage is raised overseas. Of course, if overseas lenders lose confidence in the debate in Australia on banking regulation, that can have catastrophic consequences for Australian mortgage holders. I think the people opposite know where this answer is going. We all understand that, in fact, overseas lenders have been particularly sensitive in recent times following the very difficult set of circumstances which many foreign banks have experienced through the global financial crisis.

Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Link to this | Hansard source

Mr Robb interjecting

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I always welcome the interjections of the member for Goldstein because who knows what they are going to be this week. They are very sensitive overseas to our changes in terms of banking regulation and the debate in Australia. Members opposite understand where this is going and they are not happy about it. The problems that can be caused by intemperate remarks from the opposition have a massive impact upon banking regulation. I want to know: what does the opposition have against average mortgage holders that they would jeopardise their interest rates by playing with fire? The reality is that this government, by contrast, understands the importance of banking regulation and it understands the importance of certainty. It was a Labor government who guaranteed the banks; it was a Labor government who, through the global financial crisis, ensured the settings were fair enough that we could get through it in a solid state.

Of course, the coalition shadow Treasurer very recently has said that perhaps we should—

Opposition Members:

Opposition members interjecting—

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

It was embarrassing. That is what the member for Wentworth said about his shadow coalition Treasurer colleague privately, and he should say it here. What happens is, when you start to talk about tinkering and regulating bank interest rates through the intervention of government regulation, you send a terrible signal overseas; you send a terrible signal to mortgage holders. The Australian mortgage market is too important to be treated with some sort of populist stunt. By contrast, you will see that the Labor government have cracked down on unfair mortgage exit fees; we have provided a better deal for Australians with credit cards; we have ensured that we will decrease the interest withholding tax. But, as much as the opposition may bicker and moan about the comments of the coalition shadow Treasurer, let us be clear: the comments of the shadow Treasurer put pressure on mortgage rates. If the opposition were ever to form a government, I have no doubt that they would replace the coalition shadow Treasurer with someone who at least understands the markets. The real issue here is that, when you talk about regulating the rates through ham-fisted intervention, you endanger all Australian mortgage holders.

Opposition Members:

Opposition members interjecting—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Mr Speaker, if the minister has not concluded, we would like to move an extension of time for two minutes!

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Manager of Opposition Business has had great tolerance during the day. He is now warned! As I have reminded him—he can parrot these words—a warning is a precursor to naming.