Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

My question is also to the Treasurer. Will the Treasurer outline for the House the importance of banning exit fees so that bank customers can walk down the street and get a better deal on their mortgage? How has this approach been received, and what is the government's response?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for this very important question. At the end of last year the government announced a fundamental banking reform package. Central to that package was the banning of mortgage exit fees from 1 July this year. It is important to get rid of mortgage exit fees so that customers have the capacity to walk down the road if they want to get a better deal.

What do mortgage exit fees do? They lock families into loans with higher interest rates, in particular. They lock families into loan arrangements that can cost them a lot of money. We hear from those opposite a lot about the cost of living, so I was indeed gobsmacked and surprised to find that the shadow Treasurer has decided he wants to bring back unfair mortgage exit fees. Indeed, as we speak, the Liberal and National parties in the Senate are arguing for a return of unfair mortgage exit fees. This is how Choice has described the problem of mortgage exit fees:

Business models based around trapping consumers in uncompetitive deals through complex and costly fees have no place in a reformed banking sector.

Choice goes on to say:

This is about giving power back to the most important people in Australia's banking sector—consumers.

I can tell you that consumers do not count with the Liberal and National parties. The Liberal and National parties want families to bear the burden of unfair mortgage exit fees as high as $7,000 and then claim they understand the challenge of the cost of living. It is just incredible that they are moving in the Senate, as we speak, to bring back unfair mortgage exit fees. Shame on them. How could they come to this position? It might be different if they had a whole lot of other policies—if we could nominate five or six concrete policies they had. The only policy they have is to bring back unfair mortgage exit fees.

We on this side of the House understand how important it is to get the fundamentals of the economy right, to make sure we bring our budget back to surplus and to make sure we look after people in the banking system. To this end, the minutes of the recent meeting of the RBA board included a very interesting comment:

According to the Australian Government Budget for 2011/12, fiscal policy was expected to exert significant contractionary impulse on aggregate demand over the next two years.

The Reserve Bank is endorsing the fiscal stance of this government, which is central to creating jobs and giving financial security to Australian families. And who is trying to wreck all of that? Those opposite, who want to wreck the surplus. We on this side of the House stand for responsible economic management, and they stand for wrecking the surplus and for irresponsible economic policy.