Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Hansard source

I thank the Senate. The stability of the Australian banking system has been recognised consistently by both the IMF and the OECD, but the financial crisis created significant challenges for competition in our banking market. The government remains committed to ensuring that our banking system works for Australians and not against them. The government’s banking guarantee and the direct investment of up to $16 billion in the RMBS market have supported banking competition through the global financial crisis, which hit smaller lenders particularly hard, helping them to put competition pressure on the big banks. Home lender AMP was recently even able to reduce its basic variable interest rate for new home loans by a full 10 basis points, attributing the cut directly to the government’s action. The government has also introduced the toughest laws governing consumer credit that Australia has ever seen, with wide-ranging powers to overrule unfair terms in mortgages.

Regarding ATM fees, the government has full confidence in the reforms introduced by the independent Reserve Bank. The government notes that the Reserve Bank will be conducting a review of the effect of ATM reforms 12 months from when they were introduced in March 2009. The review will consider the effect the reforms have had in the market, including the fees charged and the fee-free arrangements financial institutions have entered into for their customers, along with the effect of these changes on customer behaviour. The outcome of this review will be published in the RBA’s June 2010 Bulletin. In light of this impending review, it is appropriate to formally oppose the notice of motion.