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- Start of Business
- QUESTIONS WITHOUT NOTICE
- DISTINGUISHED VISITORS
QUESTIONS WITHOUT NOTICE
Goods and Services Tax: Banking Fees and Charges
(Crean, Simon, MP, Costello, Peter, MP)
(Brough, Mal, MP, Reith, Peter, MP)
Banking Fees and Charges
(Crean, Simon, MP, Howard, John, MP)
Private Health Insurance: Rebate
(Vale, Danna, MP, Wooldridge, Dr Michael, MP)
Private Health Insurance: Dental Services
(Macklin, Jenny, MP, Wooldridge, Dr Michael, MP)
Superannuation: Defence Forces
(Snowdon, Warren, MP, Moore, John, MP)
(Washer, Mal, MP, Ruddock, Philip, MP)
(Andren, Peter, MP, Howard, John, MP)
Asia Pacific Economic Cooperation
(Nugent, Peter, MP, Downer, Alexander, MP)
Taxation Reform: Averaging
(O'Connor, Gavan, MP, Vaile, Mark, MP)
Logging and Woodchipping
(Causley, Ian, MP, Tuckey, Wilson, MP)
Taxation Reform: Mining Industry
(Evans, Martyn, MP, Moore, John, MP)
Goods and Services Tax: Farm Exports
(Lieberman, Lou, MP, Costello, Peter, MP)
- Goods and Services Tax: Banking Fees and Charges
- AUDITOR-GENERAL'S REPORTS
- ANSWERS TO QUESTIONS WITHOUT NOTICE
- MATTERS OF PUBLIC IMPORTANCE
- MAIN COMMITTEE
- MATTERS REFERRED TO MAIN COMMITTEE
- TARIFF PROPOSALS
- GOVERNOR-GENERAL'S SPEECH
- PRIVATE HEALTH INSURANCE INCENTIVES BILL 1998
- Delfram Docking Anniversary
- Internet: Small Business
- Superannuation: Military Benefits Superannuation and Benefits Scheme
- Economy: Government Policy
Member for Bowman
- Beaudesert Shire: Pioneers
- Native Title
Tuesday, 24 November 1998
Mr CREAN (3:22 PM) —Not only have we seen the Prime Minister avoiding any commitment to do anything about the banks putting up their fees, particularly evidenced by the Commonwealth Bank's one-third increase to bring it basically in line with what other banks are doing, but we have now got today the spectacle of the Treasurer taking all day to skirt around the issue of whether a GST will apply to these fees or not. What we have got to understand about this is that it is a government that does not care, a government that is not prepared to protect the public interest and a government that wants to laugh at these issues and avoid scrutiny.
This is a Prime Minister who said he was going to be new in his approach in this new parliament, but he is the same old Prime Minister—avoiding scrutiny, refusing to answer. Now we have the Treasurer apparently making decisions on the run in relation to his tax package. No wonder we need an inquiry in the other place—this is a government that will hide and avoid scrutiny on every aspect of this tax package because it knows it cannot be made to be fair. That is the challenge that we have thrown down to the government: demonstrate how you can make the GST fair. Subject yourselves to the scrutiny. You would not do it during the election campaign and, by the look of things, you are not prepared to do it in this chamber. The other thing we say is that this GST is a bad tax for the economy and it is a bad tax for jobs.
I come to the question of the bank fees. Labor believes that the latest round of bank fee hikes demands that the government institute formal monitoring of bank fees and charges. This should be undertaken by the Australian Consumer and Competition Commission and then, if necessary, there should be full price surveillance. Had we won the election that is what we would have done. The public deserves better from this government.
The Treasurer told the public back in 1996 that red-hot competition—his words—would drive fees down. This is a Treasurer for whom you have to get the thermometer out every now and then. When he is talking about the current account deficit he is expressing cold anger; when he is talking about his policies for banks, it is red-hot competition. But all we are getting from this government is a lukewarm response: total indifference. This is what the Treasurer said:
. . . in relation to fees as well, this government takes the view that red-hot competition is the best way of having continual surveillance of financial institutions . . .
Some surveillance! Did you see the ad in the paper yesterday from the Commonwealth Bank? The latest advertised fee increase by that bank involves a 33â per cent increase in certain fees, and even a 100 per cent increase in one of the fees. Who in the community has had that sort of increase—over the last 10 years, let alone in the last 12 months? Where is the justification for this? Where is the public interest on the part of the government, because if the government does not protect the public interest, who does? Clearly it is not coming from the banks in terms of their approach to bank fees and charges.
The simple fact is that it now costs $2 each time you take your money out. For pensioners, two withdrawals a week cancels out the government's GST compensation. Remember the $4 a week that they say they are going to give them? Remember that? It is cancelled out by two withdrawals by pensioners in a week. But it is not just the Commonwealth Bank. Others have put up their fees as well, and the industry commentators predict a further flow-on to the smaller financial institutions.
One needs only to go to page 2 of the Sydney Morning Herald today to see the diagram that shows bank fees on selected accounts. The Commonwealth Bank, the National Australia Bank and Westpac all have $2 fees for over-the-counter withdrawals. Some competition! Then, for the monthly account keeping fee, the ANZ, the National Australia Bank and Westpac all have the same amount of $4. I will tell you what: red-hot it is; competition it is not. This is a government that said red-hot competition would drive these fees down.
Mr Hockey interjecting—
Mr CREAN —This is not the first time we have had a massive fee hike by the banks. In the last three years, total annual bank fees collected by the four major banks have increased by almost $1 billion to $3½ billion. That is a 40 per cent increase in fees—before this new one—over the last three years. What sort of a game do we have going on here, Minister? Is this the government that is really looking after the interests of pensioners, schoolchildren with bank accounts and low income earners who have to pay $2 every time they withdraw money? Is this the government that installed the automatic bank tellers, at the cost of thousands of jobs in the banking industry, saying that this would reduce costs? Now we find that the charges on the automatic teller machines have gone up by 33â per cent. Where is the justification for this increase? That is the question we want answered.
Yesterday the government refused to answer that question on two occasions when it was directed to the Prime Minister; in fact, on more occasions than that because we took a number of points of order to try to get him to address the question. But he is refusing to act today. Having had the opportunity to see the concern in the community at the impact of these bank fees and charges, he is still there like King Canute, believing that all he has to do is to roll up in this place and these problems will go away. This is a Prime Minister with his hands off the lever. This is a Prime Minister who does not care. As I said, if the public interest is not being protected by the government, who is protecting it?
We believe there is legitimate capacity for the Australian Consumer and Competition Commission to do the surveillance of these banks.
Mr Hockey —Why didn't you do it?
Mr CREAN —This is a commitment that this government should now undertake. It cannot hide behind the question of what we would have done, because the minister knows what we would have done. Our policy was to introduce monitoring and surveillance—and I will produce a copy of that for you, Minister, if you want it. That is certainly what we would have been doing in the current circumstances. But will this government do it? Let's wait and see. I think the pressure is going to be persisted with by us and by others in the community to make sure you discharge your obligations to the Australian public and to make sure that they are not being ripped off.
The government has an argument about the GST getting rid of FIDs and BADs—the two state taxes that are levied—but what have we got in their place?
Mr Hawker interjecting—
Mr CREAN —No, what they have got is you substituting this in its place. This is a government that is pretending, on the one hand, to give money back to consumers, only to allow it to be taken from them again.
Mr Hawker interjecting—
Mr CREAN —I say to the member for Wannon who is gesticulating with the `getting up' mannerism, that that is exactly what is happening to bank fees under your policy—a one-third increase. No-one can justify that. Pensioners, schoolchildren, low income earners—these are the people that you are allowing to be slugged. What is the point of getting rid of the financial institutions taxes if the banks can charge by way of increased fees? What is the point of that? This is the government that wants the community to believe in the mirrors approach to policy. They get out there and trumpet the fact that they are getting rid of two of these state bank taxes, but at the same time they are allowing the banks in this community to put up fees without justification and without scrutiny. And now we learn today of the possibility of a GST going on top of the fee, because the Treasurer has refused to rule that out categorically.
Mr Hockey interjecting—
Mr CREAN —If you want to rule it out, you do it. But understand what your document says, Minister:
Other financial services . . . where there is a readily identifiable fee or charge, will be taxable.
Mr Hockey interjecting—
Mr CREAN —Oh. That is a set of words that I do not see appearing here on page 96. Is this policy on the run again, Minister?
Mr DEPUTY SPEAKER (Mr Nehl) —Order! Could I encourage the Deputy Leader of the Opposition to address his remarks through the chair and not to encourage the minister to interject.
Mr CREAN —All right, Mr Deputy Speaker. I would be interested to know what his functions actually entail.
Mr DEPUTY SPEAKER —He will have a go in a minute; it is your go now.
Mr CREAN —I know. Well he might be able to tell us what his functions entail, because he has been minister for—what is it?
Ms Kernot —MPIs.
Mr CREAN —Minister for MPIs, minister for covering up for the Treasurer, the dog scurrying out of the parliament, refusing to participate in this MPI. I had a look at the web site pages. The Treasurer and the Assistant Treasurer have carved up their little patch of activities, but when it comes to the web site page for the minister sitting at the table, nothing appears.
Mr Hockey —That's right.
Mr CREAN —`That's right,' he says. He has been given no functions, except to come in here and cover up for the Treasurer. I would be interested to see what sort of a brief he has got here today.
But it is not only the document at page 96 that suggests that these fees will be GST taxed; it is also the statement in the other chamber by the Assistant Treasurer who said yesterday that, where the fee is clearly identifiable, it will be taxed. This is the conflict that we have got between this chamber and that chamber. Is it any wonder that we need an inquiry?
Did you see how long it took the Treasurer to give his answer today? I think he got close to saying something about it—and I will be very interested to read the Hansard on this—in answer to an interjection during the last question of the day on the farming community and the impact for them. This is a person who will disclose nothing about this tax package; it is like pulling teeth. He believes that the less that is known about it, the more chance it has got of getting through. Well, we are going to subject it to scrutiny, because we believe the public deserves it.
Today we are also asking the government to do something about these bank fees and charges, the hikes that have been occurring in advance of the GST coming in, wiping out all the gains of the abolition of the FIDs and the BADs. We want to know that the public interest test is being met. We want to know that the government's claim that people will be better off actually will be discharged. How will the Australian public—including Australian pensioners—be better off if, having got rid of the taxes that the government claims will be abolished, they only find higher fees and fees which escalate every time they are put up, not just by the amount that the banks decide to put them up without any scrutiny but also because they have got a 10 per cent GST applying to them? This is what the government is trying to foist on this public. Every time we put this government under scrutiny, every time we test them, every time we go after them, the package starts to unravel. That is the reason we need better scrutiny, because we will not get it in this House.
It is suggested that we will not get the taxation legislation into this House until next Wednesday. We still have not seen the Vos report, which is supposed to be looking at this question of financial institutions and the impact of their taxes. That report has now been in the government's hands for almost two weeks, yet it is not public. We are supposed to be debating this issue in the parliament next week—and I presume we will be sitting for the third week to get through it.
How can the public have confidence in a government that hides? What have they got to hide? That is the real question in this debate. They will not do anything in terms of the bank charges and they want to use subterfuge, trickery, to get their GST package up. We will make sure they are subjected to that scrutiny. We want to demonstrate that this tax is unfair, and that this is just another chapter in the book as to why the tax is fair. What they say they are giving with one hand, they are taking double with the other. It is a proposition that the government should respond to. (Time expired)