Wednesday, 27 October 2010
Questions without Notice
My question is to the Treasurer. Will the Treasurer update the House on the importance of sensible policies to support competition in the banking sector and the government’s views on recent commentary on banking competition?
I thank the member for Throsby for that question because, as we were saying in the House the other day, the global financial crisis did have a fundamental impact on competition in our banking sector and it did hit the smaller lenders very hard. Of course, there is no silver bullet solution to this challenge. These are problems that will not be solved overnight. There are a variety of reforms occurring in the international banking sector which have ramifications here. The government has been working very hard to make sure that those reforms are appropriate for Australia because those reforms are very important when it comes to certainty in our financial sector.
The government is also committed to reform here domestically when it does come to banking competition. It is the best way to put downward pressure on rates and certainly the best way to assist small business and homeowners. The government has put forward a package of measures to help smaller lenders to compete with the big banks and we have put in place tough new consumer laws to crack down on unfair mortgage exit fees. There is our investment of $16 billion in AAA-rated RMBS. That is important to provide funding support to the smaller lenders. It has been the strength of our system that avoided the destruction that occurred in so many other financial systems around the world.
The one thing we know we cannot do is fracture that consensus I was talking about before. Last week we had the shadow Treasurer come out spinning out hot air about how he was going to reregulate the banks and threaten the very independence of the Reserve Bank. So we had this brain implosion last week from the shadow Treasurer and he has spent the last four or five days trying to mop it up.
Any reference in that manner is argumentative, I would agree. I can agree on a different point of order that the intent of the new standing orders was that there should be less argument, less personality and more issues in the answers. I would ask that the Treasurer keep that in mind.
I was asked for any commentary on recent views about banking regulation and the financial system. I was talking about the fracturing of the bipartisan consensus we have had in this House when it comes to the independence of the Reserve Bank. That has now been fractured by some of the statements that have been made by the shadow Treasurer. There is now a fracturing of consensus within the Liberal Party on the banking system.
Just to explain to the House, if reference is made to comments without all the added argument and descriptions of members that are unnecessary, I would have to rule that was directly relevant. It may be something that, in the review of the procedures, people might like to take up. To the extent that a question is drafted that seeks comment about recent comments on the banking sector, I will regrettably allow those relevant answers. But when it goes to other matters and argument, that is where I think we find a line.
This morning the opposition leader was asked three times whether he supported the plan put forward by the shadow Treasurer last Thursday and three times in a row he refused to answer that question. As the Prime Minister said, he had to go out and mop it up later on radio.
Mr Speaker, on a point of order: in the spirit of the 43rd Parliament, clearly the Treasurer’s answer is not relevant to this question. He is not responsible for commentary or the opposition’s views.
Order! The Manager of Opposition Business will resume his seat. I have already ruled on these things. Yet again the difficulty we have is that the Manager of Opposition Business wants to raise points of order and then not listen to the responses, so we will get on with the Treasurer receiving the call again.
This nine-point plan that was put out by the shadow Treasurer last week has now been rejected by a number of frontbenchers. At its core it only really has one proposition—that is, he wants to have an inquiry into the financial system, which simply ignores the fact that we have got this fundamental reformation of the international financial system with all of its implications for Australia and the need for certainty. There is nothing else in any of those nine points but populism. There is no substance. There is about as much meat in the shadow Treasurer’s plan as there is in a pack of chicken nuggets.
My question is to the Treasurer. I refer to the announcement today by the National Australia Bank of a 63 per cent increase in its profit to $4.2 billion. Given the Treasurer has now given 32 warnings to the banks, I ask the Treasurer: will he accept the recommendation of the ACCC, which is supported by the coalition, and put in place legislation to prevent price signalling?
I thank the shadow Treasurer for his question. It follows the answer that I was giving before, because the government is absolutely committed to making our banking system—and, indeed, our economy—as competitive as possible. I do think there has been a degree of sense in some of the suggestions that have been made by the Chairman of the ACCC.
Opposition members interjecting—
I am sorry, but it was not. It was not a suggestion or an original thought of those opposite at all. This is something that the Chairman of the ACCC has talked about on a number of occasions, and the government has been talking to him about it, as any responsible government would do. What we have put in place so far is a range of very significant reforms, particularly the consumer reforms I was talking about before and, of course, the investment in the AAA rated residential mortgage backed securities, which are securing funding to banks. I have made it very, very clear that there is no justification for very profitable banks moving above any change in the cash rate that should come from the Reserve Bank—no justification at all. The figures from the NAB today proved that yet again.
Mr Speaker, I seek leave to table my speech. Item No. 1 is, ‘Let’s give the ACCC power to investigate collusive price signalling.’ You just said it was a great speech. Thank you.
Mr Swan interjecting—