Sussan Ley (Farrer, Liberal Party, Shadow Minister for Housing) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer explain how his bank switching package, which does not include exit fees, will help struggling homeowners when the cost of exiting a home loan can be as high as $7,580?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I am delighted to receive this question, because the bank-switching package that we are putting in place is the first time there has ever been a bank-switching package. Those opposite could not find it within their hearts to put in place a bank-switching package for 12 long years. We are working with the banks and the Reserve Bank to put in place a bank-switching package which will be fully operational by November.

For the first time, banks will be compelled to participate. This is a huge advance because, in the past, people have been trapped. They have not been able to easily move their transaction accounts, and the capacity to move their transaction accounts is a very important power to have if we want to have a competitive banking sector. When you want to move, the capacity to access your credits and your debits from your bank is very important because so much of the household budget is tied up—

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Housing) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. The Treasurer knows the question I am asking: what about the exit fees?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Treasurer is answering the question.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

This is a very important measure and yet another example of how those opposite do not understand how important competition is and how much saving a few dollars can really matter to families. But, in the case of mortgages, it can be a lot more than a few dollars. Customers have to have the capacity to shift their account. They have not had the capacity to easily do it up until now. Banks will be compelled for the first time to provide all of those details and facilitate the opportunity for a customer to move their account.

The member asked about exit fees. Did those opposite ever do anything about exit fees? No. Did they ever once mention the phrase ‘exit fees’? No. What we have done is we have had the whole question looked at by ASIC. We have for the first time got a handle on what is actually happening with exit fees. As a consequence, we are now getting a new product on the market which does not have exit fees. That is something that never happened under those opposite. Banks will now be compelled to provide for their customers all of the details so that people can easily move their transaction accounts.

Furthermore, if banks do not participate according to the code that they have signed up to, they will be liable for compensation—the first time that has ever happened—through the Financial Ombudsman Service. We will bring the full power of competition to bear so that customers can more easily move their accounts—something that never happened when those opposite were on the treasury benches.