Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Hansard source

Let me first make the observation that in the context of the coronavirus crisis the banks have actually been fantastic. They have really sought to do their bit to help support our economy through this period in terms of the way they have approached, in particular, business lending and the challenges faced by Australian borrowers more generally. In relation to the issue of the JobKeeper program and being able to use that program and the expected payment as a basis to seek credit, that is an initiative that Anna Bligh, CEO of the Australian Banking Association, flagged in a statement that she released on 5 April.

Senator Patrick, you mentioned a specific example. It's hard to make judgements without knowing the financial circumstances of an individual business as to why they may or may not be able to get financing. I was just observing in my own mind that, really, in terms of our mindset towards the banks, we seem to have come a long way from all of the recommendations for stronger protection of borrowers in the wake of the banking royal commission, to the proposition that you're putting now—that we should make sure we get rid of all this paperwork so they can get easy access to finance. So it's quite a spread in terms of the aspiration and what we're asking our banks to do. But that's just an observation on the side.

In terms of the broader issues, the government has taken unprecedented action in coordination with the RBA and APRA to ensure the flow of credit in the Australian economy, in particular for small and medium-sized enterprises. This includes the government providing a guarantee of 50 per cent to SME lenders for new unsecured loans to be used for working capital, which enables lenders to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months. To ensure support is being provided to small and medium-sized businesses across Australia, any particular bank or non-ADI lender is required to provide weekly reporting on a number of factors, including the average interest rate they're offering. This will be a way of comparing what lenders are offering and ensuring they're not taking advantage of SMEs under the scheme. In addition, the government has provided ASIC and APRA with record levels of funding, which has enabled them to increase their focus on consumer protections to ensure that all regulated entities are complying with the law.

The government has also provided the Australian Office of Financial Management with $15 billion to invest in structured finance markets used by smaller lenders, including non-authorised deposit-taking institutions and smaller authorised deposit-taking institutions. This provides SMEs with the option of going to a wider number of lenders, including small banks and non-bank lenders, to get the credit they need without having to only rely on the big four banks.

The government is also providing a temporary exemption from responsible lending obligations—going to the question of paperwork, I guess—for lenders providing credit to existing small business customers to help small business get access to credit quickly and efficiently. The government is confident that, with these measures in place, banks across Australia will do the right thing and provide support to assist otherwise viable businesses across the economy who are facing significant challenges due to disrupted cash flow to meet their existing obligations—and I stress here: this is to support and to assist otherwise viable businesses across the economy. Should banks not comply, then the government would be able to take action under the existing frameworks, including under the Banking Executive Accountability Regime, which holds banks and their senior executives to account and includes a range of tougher consequences if expectations are not met. This framework will incentivise good behaviour and ensure that banks and individuals are held to account where they fail to meet the standards expected of them.