Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I thank Senator Forshaw for his question and for his interest in this issue, which is of course fundamental to ensuring that we maximise the benefits for Australian families when it comes to the home loan interest rates on offer. We know that the global financial crisis had a very big impact on competition in the banking sector, something which might have passed by those opposite. Those on this side of the chamber understand the impact on competition in the banking sector that the GFC hit. It hit small lenders particularly hard, and this government acted to ensure that we took measures to boost competition in the mortgage market. These include helping small lenders fund their home loans, new loans to crack down on unfair mortgage exit fees and our bank guarantees. Those opposite might recall the $16 billion of investment in the AAA rated residential mortgage backed securities, which have been critical in supporting this important funding market.

The reason the government did this is that we understand that competitive pressures give banks the incentive to offer the best products to Australians at the best possible prices, and this includes encouraging banks to offer the most competitive mortgage rates. We understand, on this side of the chamber, that working families are facing cost-of-living pressures. The government’s reforms are aimed at boosting competition in the banking sector and helping Australian families, because competition means more choice for Australian consumers. This sensible approach from the government stands in stark contrast to that which is advocated by the so-called ‘economics team’ of the opposition. (Time expired)