Trevor Evans (Brisbane, Liberal Party) Share this | Link to this | Hansard source

It gives me great pleasure to speak on the House Standing Committee on Economics' review of the Australian Prudential Regulation Authority annual report 2015. I note the report and I also note the two reports which will follow this order of the day, being the committee's reviews of the 2015 annual reports of the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission.

As a former economist and having previously worked for one of these regulators, I have very much enjoyed my time on the Economics Committee so far, and I look forward to continuing to work hard and to make a contribution here. So far in this 45th Parliament, the work of the committee has included working with these regulators to explore issues relating to Australia's banking sector. APRA has its role to play in the regulation of our banks, and it was one of the many regulators we heard from, alongside the hearings we conducted with the CEOs of the four major banks.

The task of the committee with respect to the bank hearings is an important one. Our banking and financial industries weathered the recent global financial crisis relatively well compared to those in other countries. So, without in any way undermining the stability and the security of our banking system, one of our tasks has been to focus on consumer issues and address what is viewed as a pattern of conduct where the big banks have let their customers down. Quite separately, to the dozen or so other steps being taken by this government with respect to the regulation of our banking and financial sectors, these hearings have been very important and have already produced results. In fact, the committee is due to release its first report and its recommendations in coming days.

In my view, one of the most beneficial aspects of the bank hearings is the good discipline it has been instilling as the CEOs of the big banks prepare for their hearings. It is good practice for the bank CEOs to spend what I suspect were many hours, if not many days, considering what the public might wish to have them asked, speaking to their middle managers about the details of past scandals and other issues and reflecting broadly on what they might wish to better communicate to the public.

Also very important is the prospect that regular oversight will force cultural change at the most senior levels in the banks, and that will occur if we can bring about greater accountability. Greater accountability is warranted when you consider how poorly Australians believe that banks are explaining themselves when it comes to their conduct, various scandals or even just the decisions around passing on—or not—the interest rate decisions of the Reserve Bank of Australia. I am a strong believer in the disinfecting power of transparency, and confidence is one of the most important elements of what a banking system provides to our economy. We want to foster confidence because, ultimately, the growth of our nation depends on it.

I believe it is good discipline for the banks to start preparing for this type of scrutiny because, hopefully, the government intends to have them called back frequently for these hearings. While it was certainly somewhat expected to hear the banks say things like, 'Sorry,' and to acknowledge that they 'Have more work to do,' the committee's focus on the internal processes and compliance systems of the banks suggests that answers like that will quickly wear thin in future hearings. Certainly, the type of regular accountability I am describing would force faster responses to any new or emerging scandals from our banking sector compared with the years of delay we heard about in some instances. And I just want to make the additional point, in passing, that most of the terrible stories and scandals we have heard about in these hearings originated quite some years ago, when Labor was last in government and the responsible minister at the time was the now opposition leader, Bill Shorten.

It was also very worthwhile to have the banks consider and comment on some areas where the government is considering further reforms. On the topic of competition, which is very close to my heart, I was very interested to ask the big banks some questions about their own views and thoughts on the state of competition in their own industry. I note that Australia's biggest four banks collectively hold about $3 trillion of Australian resident assets, which is approximately twice Australia's GDP. I note that they collectively hold over $1 trillion in mortgages, which I understand is over 80 per cent of the market, and that they hold collectively over half a trillion dollars in business loans, which is about three-quarters of that market.

Coming from the retail sector, I was also very interested to hear the banks admitting to losing touch with their customers. In most other sectors, and especially in small business and in retail, losing touch with your customers would mean going out of business. But these companies have not gone out of business; most advised me that they had increased their market share in recent times in many major product markets. For that reason, I was also very interested to explore giving customers more power over their own data and making it easier to take their accounts with them if they switch banks. I was interested to learn how other comparable economies are enhancing consumer confidence in the sector, such as reforms in data sharing happening in the United Kingdom.

As a member of the committee, I also took up the good opportunity to ask the bank CEOs some of the questions my local constituents have been raising with me. Since these hearings will occur in the future I encourage all Australians with their own stories or concerns about the banks to contact their own MPs so that the government and the committee can continue to apply this accountability.

On the topic of customer complaints, an area of reform already mooted is the establishment of a one-stop-shop tribunal to replace the various existing dispute mechanisms and resolution schemes. Indeed, while many of the CEOs of the banks were open to establishing such a tribunal, Mr Rod Sims, the chairman of the ACCC, stated his support in favour of such a move. To help address many of the consumer groups' concerns we should be considering how a one-stop tribunal for hearing complaints can help Australian banking customers to get their issues resolved, as the Prime Minister himself has proposed. We should be thinking about how such a tribunal can be as easy as possible to access and as cheap and efficient as possible in achieving outcomes, while avoiding any overly legalistic approach.

Finally, I was also very interested to hear about the bank's approach to lending in the small business sector. Coming from a small business family and background, I must say that some of the evidence provided was somewhat unsatisfying and in my view has the potential to become a more significant issue in the future. I want to make the point very strongly that the entrepreneurship, the risk taking and the sheer hard work of our small business community right now is generating the jobs and the opportunities that our country needs so critically. We must support our rising entrepreneurs and our hardworking small business owners as they help our nation to grow, improve and advance. I will always welcome any steps the government can take to support our small businesses which are, after all, the backbone of our economy.

On that note, I welcome the appointment of the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, who I know very well from our days fighting for the interests of small business when she was with the Australian Chamber of Commerce and Industry. I look forward to her separate review into the lending practices of the banks when it comes to small business and to the recommendations she will make.

I just want to say, as I said in my first speech to this parliament, that I believe the more powerful you are that the more responsibility you have to wield your power in a way that is true to your origins and that benefits and protects those coming from the same place as where you started. That means being fair to small businesses so that they can become bigger businesses employing our friends and our family members and generating wealth that can be distributed around our continent and our society.

As I come from small business and am a former regulator and an economist, I am naturally suspicious of concentrated power, whether that is found in the clumsy power of concentrated and central government, the institutional influence of big unions or the market power of big businesses. Some of those in Australia's biggest businesses have acted as if it is possible to skirt the public contests about the regulations they comply with, to shirk the national debates that actually impact how many Australians they employ or how much wealth they generate for their shareholders and Australia's retirees. Those who shirk the national debate or have not communicated well, honestly or forthrightly with Australians about their own interests should not be at all surprised when they are targeted by public suspicion or, indeed, reforms. That is one of the reasons I was so happy to participate in the bank hearings and that is why I support holding these bank hearings into the future in the interests of transparency and to allow the banks themselves to consider their efforts to communicate more honestly and forthrightly with the public and with government.

I am looking forward to the release of the committee's recommendations in coming days and likewise I am keenly awaiting the next opportunity to continue our ongoing dialogue with our financial regulators such as the Australian Prudential Regulation Authority, the ACCC and ASIC. I note the review of the APRA annual report and I commend it to honourable members.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I wish to make a few comments regarding the House of Representatives Standing Committee on Economics review of the Australian Prudential Regulation Authority, the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission and their annual reports, but I must make some comments regarding the previous speaker's description of the banking inquiry.

Let's face it: the economics inquiry into the banks is nothing more than a diversion tactic from this government. It is Malcolm Turnbull, the member for Wentworth, doing all he can to avid a royal commission into the banks. The banking executives came here to Canberra for a two-hour cup of tea. They spent the first hour of their evidence apologising to the Australian public for all of the scandals in wealth creation, in insurance arms, in their banking and deposit schemes, in their credit card arms, in respect of their mortgage practices and for the fact that they do not pass on interest rate cuts when the RBA passes a rate cut. To say that they were inquired into, that there was a thorough investigation and that there will be meaningful recommendations coming out of the House of Representatives committee report into the banks is nothing but laughable. Nonetheless, the committee will report tomorrow, and I will make further comments regarding that in the coming days.

At the public hearings regarding APRA, ASIC and the ACCC, the committee examined the current policy settings and regulatory framework for enforcement of prudential standards and practices by APRA. Issues canvassed included competition in the banking sector, recent stress testing of authorised deposit-making institutions that APRA conducted, increased margins in small business lending, increased supervision of investor lending in the property market, rate tracker mortgages, executive accountability in APRA regulated institutions, reviews into the life insurance industry and related party arrangements, and fees and superannuation.

In his opening statement to the committee the Chairman of APRA, Wayne Byres, updated the committee on key areas of APRA's work and regulatory agenda through the course of the year since the previous hearing with the committee in March 2016. The chairman reiterated APRA's view:

… that a strong, stable and competitive financial sector is essential for the ongoing prosperity of the Australian community. Importantly, we do not see enhanced safety as necessarily requiring a trade-off with competition. Rather, the two are complementary since only sound financial institutions will be able to support their customers – both existing and new – through good times and bad.

The committee also examined the current policy settings in corporate, market and financial system regulation, focusing on ASIC's surveillance and enforcement activities, the powers and recent activities of the ACCC, resourcing of the organisation, sectors of concern and priority areas for the ACCC.

Competition in the banking sector was also discussed as were other matters, including petrol pricing, food and grocery code of conduct, and the motor vehicle aftermarket. I expressed some concerns regarding the motor vehicle aftermarket, particularly regarding the fact that there had been claims that the big companies that lease vehicles, the big sellers of vehicles and the big manufacturers of vehicles in Australia—or those that used to manufacture in Australia but no longer do—were withholding information from smaller vehicle repairers and smash repairers. That information relates to the computer codes and computer systems that operate in every car these days. There has been an inquiry announced. The government did promise prior to the last election to undertake an inquiry. They have not done that but we found out through this questioning of the ACCC that the government will adopt the ACCC's inquiry and their findings, so that is something that we will be keen to see in the coming months.

In the week preceding, the committee had been asking questions of the CEOs of the big four banks. Unfortunately, the same issues that plagued those sessions with the banks—namely the lack of adequate time for effective questioning—also affected the committee's ability to properly and sufficiently scrutinise the regulatory institutions. When we talk about the gamut of issues that had been covered, which I mentioned earlier, we really only got two or three questions for each of the regulators regarding the operations of the banks.

Nonetheless, in every respect, the regulators were quite scathing and there was the occasional revelation, such as the admission by the head of the Australian Securities and Investments Commission, Greg Medcraft, himself a former banker, that the major determinate of mortgage rates set by the banks is the RBA cash rate. This statement was directly contrary to the evidence that was given to the committee by the representatives of the four major banks when they claimed that the cost of capital and how they sell and set their mortgage rates was not majority determined by the RBA cash rate but by the price of that capital on international markets. So there is an interesting contrast between the evidence that was given by the chairman of ASIC and the evidence given by the CEOs of the four major banks.

This was a startling revelation that proved further that a royal commission into the banking industry is the only way to get to the bottom of the practices that banks utilise, often to the detriment of ordinary Australians. Over the course of the hearings and in recent years, Australians have become used to reading in the newspapers and watching on their newsreels at night stories about the banks ripping off Aussie customers. Every Australian uses a bank, but too many Australians are being used by their bank. It is time the government did the right thing and established a royal commission to shine a light on the toxic banking culture and put an end to the rip-offs and shonky dealings once and for all. Only when we have that thorough investigation over a long period of time with an independent arbiter will we be able to get to the bottom of what is really going on in the banking industry and change the culture, because everyone, including some of those CEOs, admitted that there does need to be a change in the banking industry in Australia.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

To assist the House, unless the member for Perth particularly needs to speak—I will allow latitude, the same as what we had from the former speaker. I need to get through three committee reports. The first is the one from ASIC. If there are no further speakers on the ASIC report, I would like to move to the Australian Competition and Consumer Commission report. I will give you as much latitude as you want, because they are all economics based. That being the case and there being no further speakers, the debate is adjourned and the resumption will be made an order of the day for the next sitting.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise to make a few comments on the hearings we had with the ACCC and the chairman's comments, during those hearings, on section 46 of the Competition and Consumer Act 2010, formerly the Trade Practices Act. I would like to start off at the point where our trade practices act actually originated. It is the greatest honour to have Heather Henderson, the daughter of Sir Robert Menzies, here in the chamber, because it is with Sir Robert's speech 'The Forgotten People' that I would like to start. It is the genesis of our trade practices act. The speech is from 1942, in the middle of the Second World War. He talked about the type of people that he represented in parliament. Sir Robert Menzies said:

… the kind of people I myself represent in Parliament—salary earners, shopkeepers, skilled artisans, professional men and women, farmers, and so on. These are, in the political and economic sense, the middle class. They are for the most part unorganized and unselfconscious. They are envied by those whose social benefits are largely obtained by taxing them. They are not rich enough to have individual power. They are taken for granted by each political party in turn. They are not sufficiently lacking in individualism to be organised for what in these days we call 'pressure politics'. And yet, as I have said, they are the backbone of the nation.

He finished that most famous speech with the following words:

… what really happens to us will depend on how many people we have who are of the great and sober and dynamic middle-class—the strivers, the planners, the ambitious ones. We shall destroy them at our peril.

Twenty years later, on 12 November 1963, Sir Robert gave another speech. He talked about the formation of what would be called a restrictive trade practices act or trade practices act. He said:

It is of the essence of competitive enterprise that … the road to advancement in any business should be open to all. This system we wish to protect. Privately imposed restraints which are against the public interest or submit the small trader to oppressive limitations should be eliminated.

He went on to talk about setting up a trade practices act after the election. This was the genesis of our trade practices act. It was to provide equality of competitive opportunity to the small trader. Sir Robert Menzies understood the importance of that. Yet for decades we have had a trade practices act that has failed to do so.

The ACCC chairman, in his opening statement, said of section 46:

The current law in itself is badly crafted, but further it has been interpreted by the courts as largely unworkable. So having an effective misuse-of-market-power test rather than an ineffective one can only be pro competition and I think pro innovation, in a way I will illustrate.

He continued:

… whatever other way you want to look at it, the key provision we would want to use if the major banks were to seek to remove important new competitors is section 46.

This is where I take a different view to the chairman. He went on:

But, with all that is going on that we hope will occur in banking with new technology, the change to section 46 cannot come too soon, because at the moment we could not deal with that form of exclusionary behaviour. But, with the new Harper 46, we can.

With the greatest respect to the Chairman of the ACCC, I disagree with his summary. The current provisions of section 46 of the trade practices act have three hurdles. The first is that there must be a substantial degree of market power. You must show that the company had a substantial degree of market power. Second, they must have taken advantage of that market power. Third, it must have been done for the purpose of damaging a competitor.

The problem with the structure of that law is that it has been extremely difficult to show that a company has a substantial degree of market power. It goes back to 1986, over 30 years ago. This parliament tried to fix that. The 1986 amendments to the Trade Practices Act, 30 years ago, changed it from substantial control of a market to a substantial degree of market power, because they thought the test was too high. That change 30 years ago did nothing, and we are stuck where we are today.

This has been a bit of a false debate. Many people have argued that in section 46 we should change the word 'purpose' of damaging a competitor to 'effect' of damaging a competitor. That overlooks the fact that section 46(7) of the act has a specific provision that says you can infer the purpose from the conduct. You do not need a smoking gun or some type of document that shows a company went out to deliberately damage its competitors; it can be inferred from the conduct. So the idea over these years about simply changing the word 'purpose' to 'effect' has been, I think, a funny debate.

This change is being described as an effects test, but what it is proposed to add on to the law is the effect not of damaging a competitor but of substantially lessening competition, and that is a completely different test. We have that test currently in the mergers provision. So, when the ACCC analyses a merger, the test is that that merger will be blocked if it substantially lessens competition. But we have seen how little that is used, because in most of the mergers that go through in this country there is not a substantial lessening of competition, so therefore the merger goes ahead. So in fact what we are doing is putting another hurdle into this act which will actually make it harder to prove that a small business has been damaged by anticompetitive conduct. We are not making it easier with this provision.

One of the other issues that we have is that the first provision is that, for there to be a breach of section 46, you must show that the firm has a substantial degree of market power. The ACCC were at the hearing basically saying that they thought this act would help them to take action against anticompetitive conduct in the banking industry, but the problem is that, if you are going to use this act, you have to show that one of the banks has a substantial degree of market power in some market. I specifically put it to the ACCC—the chairman and the other ACCC board members that were there—and not one of them could identify any market where any bank had a substantial degree of market power, because the test that the courts have held to show that a firm has a substantial degree of market power is that they have to be able to raise prices without losing business to their competitors. Where you have at least four competitors in the banking sector, in a theoretical market, if I am with the ANZ and the ANZ put their price up, I can simply move to Westpac, the Commonwealth or the NAB. So therefore I am at a loss to see how, even though the banks are so powerful—probably the most powerful organisations in our country—they are going to meet the threshold of having a substantial degree of market power. If you cannot get over that hurdle, the entire section 46 is completely and utterly useless as far as the banks go.

The other issue is that firms can engage in anticompetitive conduct to damage the competitive process without a substantial degree of market power, and that was noted in the Boral case some years ago, where Justice McHugh said:

Conduct that is predatory in economic terms and anti-competitive may not be captured by s 46 simply because the predator does not have substantial market power when it sets out on its course to deter or injure competitors … Section 46 is ill drawn to deal with claims of predatory pricing under these conditions.

We are doing nothing. The Birdsville amendment is there to deal with this exact thing that Justice McHugh spoke about, and the proposal is to get rid of it. I cannot agree with the amendments that have been proposed, and I think the hearing with the ACCC shows the weakness of it.

Tim Hammond (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I rise to address this place on the recent review of the Australian Competition and Consumer Commission annual report 2015—the second report—by the Standing Committee on Economics. Before addressing the substance of that report, I would also like to join other honourable members in acknowledging Mrs Henderson in relation to her presence in this place. I pay my great respects to both her efforts and the efforts of her predecessors.

Before addressing this place in relation to the substance of the report produced by the ACCC and, more importantly, by the Standing Committee on Economics, it is also appropriate to thank those committee members who do all of that hard work, quite often unheralded, behind the scenes. It may go unnoticed by some. It certainly does not go unnoticed by all.

A division having been called in the House of Representatives—

Sitting suspended from 17:56 to 18 : 05

As they say in the classics, once more with feeling. Before I was interrupted I was acknowledging the very hard work undertaken by the economics committee in relation to its review of the Australian Competition and Consumer Commission's annual report. It is also appropriate to acknowledge the ACCC for the time they gave for the hearing and for the substantial preparation they did to provide such cogent and helpful information. Last but most certainly not least, the unsung heroes of this report are the committee secretariat, who did great work.

Before I go on to make some comments about the substance of the report I would like to touch on a couple of the comments made by the honourable member for Brisbane. Those on this side of the place might recall some substance of his comments as he was purportedly speaking to the review of the Australian Securities and Investments Commission annual report. However, any causal connection between his commentary and the substance of that report was woefully lacking. In relation to those remarks, I hark back to another great popular culture song of our time and say that I still have not found what I am looking for.

The honourable member for Brisbane, however, did have a number of very telling things to say about what I must say was a very rosy and flattering assessment of the state of our banking industry. I will touch upon some of his comments before going to the substance of this report because, ironically, some of the remarks from the member for Brisbane are relevant apropos the report undertaken by the ACCC as far as the conduct of the big four banks is concerned. As a matter of fact, I took the liberty of making some notes while the honourable member for Brisbane was on his feet. I understand that in the past we have had GroceryWatch, Fuelwatch—

Honourable members interjecting—

What might be good for the goose is certainly good for the gander because I undertook a fabulous 'scandal watch' word count in relation to the member for Brisbane. What did I come up with? It was like malfeasance bingo. These are the words he uttered. He mentioned not once, not twice but three times the completely unsatisfactory delay by the big four banks in so far as mums and dads in the community go. So there was acknowledgement of the delay.

What was the other 'scandal watch' word? 'Misconduct'. The member for Brisbane was talking about how wonderful it was that the CEOs of the big four banks were able to commit such time in their jobs to sit down and review their evidence insofar as banking misconduct in their banks was concerned. The member for Brisbane was saying how wonderful it was in that it allowed those CEOs time to speak to middle management about the sorts of delays and misconduct that were occurring in those banks.

He then talked about the need for the wonderful disinfectant. The member for Brisbane said that the best disinfectant was transparency, inferring of course that there is a need for greater transparency in relation to the conduct of our big four banks. So then 'transparency' was the buzzword in the member for Brisbane's speech. And then it was 'scandals'—again, not one mention, but two mentions of scandals—in relation to the conduct of the big four banks. So let us go back through them again: we had conduct, we had delay, we had scandals and we had the need for transparency being the best disinfectant money could buy, so to speak. Put all that on one side, and what conclusion does that logically lead one to? If one accepts all of those things to be true, one would think a process to try to ensure that this culture was avoided in the future would be a thorough, forensic examination under oath with wide terms of reference in relation to systemic cultural issues of an incredibly tightly held, but fundamentally important aspect of the commercial banking sector in this country—and if not in this country, then all over the globe.

How do we address these deficiencies that the member for Brisbane was only too ready to acknowledge were there? We address them with a royal commission. If we are really serious about getting to the bottom of these issues and this conduct that the member for Brisbane said was there, in his capacity as a committee member, then let us do the job properly. Here is what one should not do in relation to acknowledged conduct that I have already described. Do you give corporations a reward for that sort of conduct? How about if we just give them some more money? Wouldn't that be a great idea? It is extraordinary to think that what we have here, proposed by the other side of this place, is that, in exchange for acknowledgement of that conduct, we are going to put into place a multibillion dollar tax cut over the course of 10 years, costing $50 billion, of which $7 billion goes to the big four banks.

The member for Brisbane did talk about the need to shine a bit of a light on this. In doing so, he said a tribunal might be a good idea. When he talks about a tribunal, I am reminded of that process of poaching. You might not know this, but sometimes the way to catch a trout in a stream—when you want to get that fish from the stream to the riverbank—is to very slowly approach the riverbank, put your hand in the water underneath the trout and tickle the trout's belly. You tickle the trout's belly until it falls asleep, until it is lulled into this false sense of security. Then, when it is just so dreamy and content, it is flicked out onto the riverbank. The problem with that is that it just does not happen that way. The trout never lands on the riverbank; the trout just keeps on swimming. This is what is going to be achieved in the conduct of a tribunal. For the big four in the banking sector, those trouts will just keep on swimming—you mark my words. If you are very serious about catching these fish, you will use a hook and a line, which is what a royal commission is.

They are the issues that the report that I am here to discuss, which is the ACCC report, actually tackles. They acknowledge that this sector is not nearly as robust as it needs to be in relation to ensuring that the conduct of the big four banks is properly regulated. As a matter of fact, Mr Sims remarked, at paragraph 2.4 of the report, the substance of which I have been addressing:

There seems a lack of very robust competition in banking. The Australian banks are very profitable and there is nothing wrong with that. We like our Australian companies to be as profitable as possible …

But he goes on to say:

We are not seeing as much robust competition as we would like.

In the substance of the report, Mr Sims also remarked upon the lack of access to justice in relation to mums and dads, who are vulnerable and very much at the mercy of the decisions that these companies make at their discretion. Mr Sims said:

… ‘access to justice’ is complicated and gets tangled up with questions of legal aid and also issues about how it might be made easier …

There are two words to make it easier: 'royal commission'.

Meryl Swanson (Paterson, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the House economics committee review of the Australian Competition and Consumer Commission annual report 2015, tabled in parliament this week. I support the work of the ACCC in promoting competition, fair trade and regulation of national infrastructure for the benefit of all Australians. I also support and thank the House economics committee for its work in inquiring into the activities of the ACCC and focusing in their report on matters raised at public hearings. The matters raised at the hearings are as relevant to my electorate of Paterson as anywhere across the country. I think they really do focus in on what is on the minds of Australian people. They include competition in the banking sector, petrol pricing and the consumer experience of the rollout of the NBN.

I want to start with petrol pricing and note that the committee queried why there can be a significant variation in fuel prices at the pump between towns and regional centres that are geographically quite close. For example, driving across my electorate, it is not surprising to see petrol prices differ by 20c a litre in one day between service stations 20 kilometres or so apart. For example, today at 11 am E10 petrol at the Metro in Kurri Kurri was 113.9c a litre whereas at the Coles Rutherford service station it was 134.7c, more than 20c in less than 20 kilometres—on a Tuesday at 11 am. Chairman Rod Sims told the committee that the ACCC's regional study on petrol prices in Darwin and Launceston had revealed higher than normal profits at the retail level, but this transparency and exposure had had a big effect on bringing fuel prices down. He noted that two further studies on petrol prices are underway at the ACCC and, at the conclusion of these, there might be more transparency and exposure on the issue. I, and my constituents, very much look forward to that and do not look forward to a 20c difference in petrol prices in less than 20 kilometres.

I now turn to the banking sector. Chairman Rod Sims said that the role of the ACCC in the financial sector was no different to any other sector in the economy, but it is restricted to competition matters. The ACCC is not the consumer regulator for financial services, so their focus is on mergers, cartels and anything that involves a lessening of competition. Mr Sims did say, however, that the ACCC does have some general concerns in relation to banking, in particular, 'There seems to be a lack of very robust competition in banking'—Rod Sims himself said that. The chairman said that the Productivity Commission was placed to conduct a review of competition in the banking sector. However, Labor firmly believe in a healthy and profitable financial services sector, but not one that takes advantage of its customers.

Confidence and trust in the fairness of the Australian financial services industry has taken a huge hit after a series of scandals and high-profile consumer rip-offs in recent years. Retirees have had their savings gutted, families have been rorted out of hundreds of thousands of dollars, small business owners have lost everything, life insurance policyholders have been denied justice and whistleblowers have suffered appalling treatment at the hands of their employers and the corporate regulator. Labor believe that the only way to improve the culture in our banks is through a royal commission. As a community, we need to understand how widespread instances of illegal and unethical behaviour are within Australia's financial services industry. We need to know how Australia's financial services institutions treat their duty of care to their customers. We need to know about the culture, the ethical standards and the business structures of Australian financial services institutions and the effect of their behaviour on other institutions, whether Australia's regulators are really equipped to identify and prevent illegal and unethical behaviour, and we need to know comparable international experience with similar financial service industry misconduct and best practice responses to these incidents. If banks have nothing to hide, if indeed they are beacons of financial fairness and organisational excellence then they should welcome a royal commission to showcase how well they do their job.

I would now like to turn to the NBN. The chairman of the ACCC said that telecommunications had been a sector of concern given Telstra’s control of the copper wire network. The committee sought advice from the ACCC on issues around National Broadband Network access and speed and the potential packaging of offers. The chairman said that the ACCC is looking at a number of matters in relation to the NBN but that speed and access were two different issues. He said that the ACCC was looking at speed claims made by internet service providers and whether, indeed, those claims could be delivered.

The ACCC said in its annual report that it wanted to see consumers provided with better information about broadband speeds to improve competition and consumer outcomes in the retail broadband market. It completed a three-month broadband performance monitoring and reporting pilot program this year, and next year it will invite comment from the industry and consumers' views on broadband speed and performance information. This is welcome. Labor can certainly provide plenty of feedback on consumer broadband speed and performance. Our offices are inundated with complaints. Some relate to services provided by the ISPs, but many relate to the rollout of this second-rate National Broadband Network itself.

Then, there is the buck passing that occurs between the two. On the issue of service providers, my office has been helping a resident of Vikki Avenue, Rutherford, who had connected to the NBN via a $90-a-month Telstra plan which has a capacity for 25 megabits per second download speed. She is not, however, receiving that speed and complained to Telstra. When she could not understand their response, she came to us. In a nutshell, Telstra said the service was advertised as being 'up to' 25 megabits per second, and that it did not, according to the service agreement, guarantee the top speed at all times—read the fine print. Another Rutherford resident who complained to Telstra about slow speeds was told that this was an NBN congestion issue because the exchange and lines were not set up to cope with such high speed.

On the issue of NBN Co, in the past week we have heard from residents of Bairds Close, Rutherford, which is clearly shown on the rollout map as being service ready. However, the entire street is unable to access the service. NBN Co is yet to give a reason for this, except to say, 'We're working on it.' All neighbouring streets are able to connect, but not Bairds Close. We have also heard from a number of residents of Cedar Wattle Close, Aberglasslyn, who have told us they are also listed as service ready but are unable to connect. Neighbouring streets are able to connect, but not Cedar Wattle Close. They are working on it.

We also heard from residents in Gillieston Heights, where more than 100 people were told by NBN Co they were able to connect, that ISPs were refusing them service, saying they were not able to connect. My staff members have spoken with NBN Co and Telstra and uncovered that, in the NBN system, the properties had been referred to as 'units', whereas, in the Telstra system, the properties were referred to as 'villas', meaning the systems were not matching up. It was a simple problem, really, but it was only solved because one of my staff spent considerable time trying to get to the bottom of it. If there had been consistency to begin with, these residents of Gillieston Heights would have been able to connect to the NBN months ago.

Also in Gillieston Heights, we have heard from several households in Saddlers Drive who are without service despite the NBN website saying they are service ready. The explanation is unclear, but it looks like they were not connected at all. They will need to wait for NBN Co to get back out there and finish the job. Surrounding houses and streets are all able to connect, but those few in Saddlers Drive are not.

It is a noble set of goals for the ACCC to want to see consumers provided with better information about broadband speeds, to provide competition and consumer outcomes in the retail broadband market. However, their work is cut out for them, given the second-rate NBN that ISPs have to work with—a result of the abject failure of the Turnbull government to deliver the broadband service the community both demands and deserves.

Andrew Hastie (Canning, Liberal Party) Share this | Link to this | Hansard source

There being no further speakers, the debate is adjourned, and resumption of the debate will be made an order of the day for the next sitting.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I would like to make a few comments on the argument between a tribunal and a royal commission. Today we have heard several speakers from the Labor Party talk up the royal commission. In the few minutes left, I would like to illustrate how flawed that thinking is and how it is actually against the interests of those who think they have been hard done by by the banks. As the Chairman of the ACCC, Mr Sims, has said, one of the great problems with the banking system we have is that there is a lack of access to justice. Someone who feels as though the banks have done the wrong thing by them—whether the banks have engaged in unconscionable conduct, whether they have breached a contractual provision or whether they have engaged in misleading or deceptive conduct—simply does not have the ability, especially as a small business person, to take their case, once it is above the threshold, to the Financial Ombudsman Service. The only option they have at the moment is to take their case through the Supreme Court. The cost for a small business person or an individual consumer to take their case to the Supreme Court tilts the playing field too much against them and in favour of the banks.

That is where a tribunal can actually overcome those provisions. A tribunal can do everything that a royal commission does and more. A tribunal will be able to award compensation. Someone who feels that the banks have engaged in unconscionable conduct that has caused them a loss will be able to have their case heard before a tribunal at a low cost and have that case determined. If the banks have in fact engaged in unconscionable conduct, in breach of the statutory provisions that we have, that tribunal can award compensation. That is something that a royal commission cannot do.

The only people who will win from a royal commission are the lawyers. It will simply become a gravy train for the lawyers that will go on and on for years. What will happen once it is finished? It may then recommend that there should be a tribunal. But the problem for all those people who have had things done wrong by them is that, by the time they get through all those years and pay all those millions of dollars to the lawyers, the statute of limitations for unconscionable conduct or misleading and deceptive conduct, which is only six years, will have expired. Those people will have been timed out.

We ask that the Labor Party, rather than following their flawed way of thinking—this tunnel vision of just going down the one track—come on board with us on the tribunal. Let's get together and work out how that tribunal should work. Give it every single power of a royal commission: the ability to subpoena documents and the ability to make awards of compensation. Let us allow those.

Honourable Members:

Honourable members interjecting—

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Exactly right! Allow those who have had the wrong thing done by them to get justice. That is what we should be about here—not grandstanding through a royal commission, not running up millions and millions of dollars in costs for lawyers. I would call on the opposition to try and put aside their partisan hats, take off their blinkers and let us try and do the right thing by people who have had the wrong thing done to them by the banks. Give them the opportunity to actually get access to justice, because that is what this should all be about.

Ultimately, if you are talking about changing the culture, a tribunal is what will change the culture. If the banks are sitting down to negotiations in a commercial dispute with a small business person or a consumer and they know that they do not have the fallback position of, 'Well, sue us. Take us to the Supreme Court. You can't afford the costs, so you can't win,' but they can be taken before a tribunal and have their documents subpoenaed, that levels the playing field. That changes the culture. Let's get together on this. Let's work together as parliamentarians in the best interests of the consumer and the small business people of this country.

Andrew Hastie (Canning, Liberal Party) Share this | Link to this | Hansard source

It being just short of 6.30, the debate is interrupted. The debate is adjourned and resumption of the debate will be made an order of the day for the next sitting. The member for Hughes will have leave to continue his remarks, if there are any further remarks.