Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Hansard source

I was asked about interest rate pressure. What I can say to the shadow Treasurer about interest rate pressure is I understand that families are under pressure from interest rates and paying the mortgage. I understand that in the past, under the former government, they struggled with higher interest rates than now. But interest rate movements do cause pressure on working families—absolutely right—which is why of course we want to make sure that there is competition in banking so that people have the ability to shop around and get a better deal. That is why the government has already acted to introduce competition reforms, and we will act to introduce further competition reforms. Even today, if you check the products and prices that are on offer, my attention has been drawn to the fact that a good bank, Adelaide Bank, from my old home town, is offering a mortgage rate of 6.59 per cent compared with, for example, today’s Westpac mortgage rate of 7.86 per cent. It does make a big difference to families if they go and get a better priced product. The difference in cost between Westpac and the Adelaide Bank is $245 a month. I give that as an example because it shows that if you can facilitate competition in banking, if you can enable people to move from one product to another, then they can look around, look for better deals and use their purchasing power effectively as consumers to drive different conduct in our banking sector. That is why the government has delivered competition reforms in the past and that is why we will deliver further competition reforms.

In terms of the macroeconomy and supply-side constraints, we as a government understand and we have understood for a long period of time that we need to lift the productive capacity of our economy by investing in human capital. That is why we have a transformational education agenda after 12 long years of neglect, why we are nation building with the infrastructure projects, overseen by the government generally and particularly by the minister for infrastructure. That is why we are so committed to the delivery of the National Broadband Network, because of its ability to drive new ways of doing business, new productivity enhancements, new ways of expanding economic capacity.

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