Gerard Rennick (Queensland, Liberal Party) Share this | Hansard source

Banking is an essential service. Like most other essential services in Australia, we have both a private sector and a public sector. We have private and public schools and we have private and public hospitals, so I see no reason why we shouldn't have a public bank. I would like to point out the Robert Menzies government were quite happy with the fact that we had a public bank. There was never any need to sell off the CBA, the Commonwealth Bank, in 1992. Over the three tranches it was sold for $8 billion, yet today it makes $10 billion a year annually. We have got a serious crisis in this country whereby people cannot get access to proper banking services, especially in the regions, but we are seeing more and more branches closing in outer metropolitan areas as well.

I believe that a public bank can fill the gap left by the private banks who are failing to provide these services. They can provide face-to-face services in terms of cash, credit cards and lending. It's very important that we increase the range of products available to people. I don't believe is that competition in the banking sector in Australia is robust, and I'll give you one example. In the United States, you can get a home loan for up to 30 years, yet here in Australia the longest you can get a home loan for, in most cases, is five years.

We have people who are lying awake at night wondering about whether or not the RBA's going to raise interest rates and put their nose to the grindstone even more. What we will see over the next six months is a mortgage cliff where a lot of people—I forget the figures quoted yesterday in the Australian, but it's tens of billions of dollars—are going to come off fixed-rate interest rate loans and go onto variable rates at about three per cent higher. That is going to put a lot of Australians under pressure. One of the things that a public bank could do is offer much longer fixed-term loans at, say, 10, 15 or 25 years to give our hardworking Australians comfort in the fact that they know what their mortgage rates will be set at for a long time into the future.

But it's not just that product that needs to be offered. One of the reasons why I ran for parliament was because of my annoyance with a section of the tax act called the public offer test. It basically says that if you're a foreign bank and you lend money into Australia, the interest that we pay offshore isn't taxed. What I want to know is why we can't have a bank in Australia that offers a product to retirees or first home buyers who can put their money into a bank account where they are offered tax-free interest and fees? This would be a much more efficient way of encouraging people to save than superannuation, which forces people to give their money to someone that they've never met and there's no guarantee that they are going to get that money back when they're 65. The Productivity Commission has said that cost, that superannuation cost, is $30 billion a year. So why not offer a service to Australians where they can get tax-free interest on a bank account that encourages them to save both for their homes and for their retirement?

The other thing that this bank could do is offer insurance services. The biggest cost of insurance today is the cost of reinsurance that we have to pay offshore, and that comes in at about 40 to 50 per cent of the insurance cost. I don't know about you, but my insurance bills lately have been coming in as high as a 30 per cent increase from the prior year. Yet again, since we privatised the state government insurance offices, we have not seen increased competition; we have actually seen more gouging in the insurance sector. It is hurting home buyers. It is hurting people who run businesses. It is hurting community groups like the show societies who are struggling to find insurance. Why can't the federal government just offer reinsurance or reinsure itself and we go back to having a national government insurance office that can offer insurance in these branches, along with home loans and along with face-to-face services?

It is not good enough for the banks to be closing in the regions. They have a social licence. They are skimming $7 billion a year on the term-funding facility as a result of COVID, and they were bailed out in the GFC. Ultimately, the taxpayer underwrites these banks, so I don't see any reason why we can't have a public bank to make sure we keep these guys honest. (Time expired)