Mr MARTIN (11:21 AM) —I think it is quite timely that, in an editorial in today's Australian Financial Review , we are reminded that, 15 years ago today, at 1 a.m. on Friday, 9 December 1983, two men took a decision that would forever change the Australian economy. That editorial refers to the decision taken by then Prime Minister Hawke and then Treasurer Paul Keating to float the Australian dollar.

Much has been said in debate in this parliament over the last several years about the way in which Australia's economy has been internationalised. Much has been said about changing circumstances with respect to our financial institutions. Also, of course, as in the old adage, success has spawned many fathers, while failure is often an orphan. In the case of success with the Australian economy at the present moment—the Treasurer is trumpeting five per cent growth rates, low interest rates and so on—if you could believe everything that the Treasurer said, you would believe that it all happened in the last 2½ years. But, as was clearly identified in the editorial today, anybody who sat back and dispassionately analysed just what major contributions had been made in terms of Australian economic policy in the last 15 years to enable the government to claim the success that they believe has been engendered in the Australian economy in recent times would, I am sure, agree that it was in fact a number of decisions over the past 15 or so years that have assisted that process, not least of which was the decision to float the Australian dollar 15 years ago today.

That was a decision that was taken in some very interesting times, and it was taken by the Labor Party. It was taken by a Labor Party that, over a long period of time, had really been at odds over the concept of whether there was a community service obligation on the part of banks to deliver services in Australia generally. It was at odds with traditional views within the Australian Labor Party that, in some way, the banks themselves were part of a money power conspiracy which seemed to be established for the capital side of the equation; it did very little for the working class in Australia. It was taken at a time when that government, within a relatively short space of time after coming into power, had been faced with a massive inflow and outflow of capital on a regular basis from Australia. In terms of what to do with Australia's currency, over a long period of time Treasury officials had always said that it should be propped up and that we should not engender a float. The view that was subscribed to at the time by Treasury officials, led by John Stone, clearly was against what was happening around the world.

The decision taken by a Labor government and by Labor Prime Minister Hawke and Labor Treasurer Keating was a very courageous decision at that time. In the subsequent years we saw that decision built upon. We saw that decision built upon in the Australian banking industry by a subsequent revision of Labor policy in respect of the entry of foreign banks. We saw the government decide that it would licence 16 foreign banks. In the final analysis, 15 foreign banks took up those licence opportunities. That decision came after much debate, much pain within the Labor Party, but it did demonstrate that a genuinely progressive Labor Party was prepared to look at its policy and, where necessary, change it.

As a consequence of that decision we saw quite a number of foreign banks enter Australia. They did not come in and do everything they were supposed to do. They did not come in and set themselves up to be genuine competitors in a traditional banking sense to the big four banks that were in Australia, but what they did do was come in and offer real competition, particularly in niche markets. The business sector, in particular, was one area where competition became rife.

The Labor government subsequently changed that policy and agreed to put a numerical cap on the number of foreign banks that could operate in this country. We then changed the policy again and eliminated that numerical cap. That resulted in an exponential increase in the number of foreign banks here. We saw some come and go but what we have seen is a strengthening of many of those financial institutions.

What we have also seen accompanying that around the world now is a whole series of bank rationalisations between big foreign competitors and foreign banks which are operating in Australia. We have seen major banking institutions merge to form megabanks. Those banks operate in this country and they compete against our own domestic banks. Is it any wonder that at the present moment there is so much confusion out there in the community about what the government's intentions are in respect of Australian domestic banking?

I am pleased that the speaker before me, the honourable member for Wannon, participated in this debate because in the last parliament he chaired an inquiry into an aspect of banking. As I understand it, that inquiry will continue in this parliament. The inquiry is looking at the way in which banking services can be provided in regional and remote Australia.

A consequence of domestic pressures, of competitor edge and so on, has been a shrinking, in some locations, of traditional banking services delivered by the traditional big four banks, but in other cases we have seen community based banks like Bendigo Bank and so on coming in to take the place of those banks that have decided to exit some of those locations. We have also seen credit unions and building societies taking a more active role. In recent times we have seen proposals for a people's bank to be established by the Australian Local Government Association, and we have also seen chemists talking about operating in-store banks.

What we have also seen over time is the way in which technology is helping ordinary customers in dealing with what they have perceived previously as traditional financial arrangements. When people shop at a Woolworths or a Coles supermarket they simply swipe their card. Madam Deputy Speaker Gash, I am sure you have seen that in the supermarkets in Nowra or in the Southern Highlands. People now buy groceries or clothes or anything else simply by using EFTPOS facilities. Alternatively, before they go into those particular stores to shop they simply go to an ATM somewhere and withdraw money. Those ATMs are now multi-linked across a whole variety of financial institutions. That level of technology has been with us for some time and people are now starting to feel much more comfortable with it. Similarly, of course, you have telephone banking and banking on the Internet. Internet banking is growing rapidly and will be offered as a product by major banks shortly. You will see that those opportunities are going to present some real benefits to people in Australia.

Is it any wonder then that there is still some confusion as to what the government's policy is in respect of the future of Australia's big four banks? Some short time ago, we had the Prime Minister apparently giving some succour and comfort to the big four, suggesting that mergers would be allowed. We subsequently had that particular view disavowed. We then had a view expressed by the Minister for Finance and Administration that all policy was under review. That was disavowed two days later. We then had other mixed signals sent to the broad community that maybe the government would be prepared to review these sorts of issues.

Mr Deputy Speaker Mossfield, I know you have a particular interest in the issue of elimination of some banking services in your own electorate. I know you are concerned about the way in which suburban banking branches are disappearing in your own area. But what, in a broader picture, people are concerned about is the direction in which the government intends to take policy in respect of the big banks, and whether mergers are going to be allowed.

Labor for its part, of course, has steadfastly refused to embrace the notion that there should be a change in the four-pillar policy. However, as we embark upon policy review at the present moment, I am of the view that we should not necessarily simply say—for some of the bad old bank-bashing reasons that are quite easy for any politician to use—that we will not consider any option before making a final decision.

The world has moved on and the world has changed dramatically compared to what it was in the 1930s, 1940s and 1960s in terms of the provision of financial services in Australia. The world has changed dramatically in terms of the internationalisation of our economy, much of it done by a Hawke-Keating Labor government. Much has changed in terms of the way in which we have internationalised our financial services. Yet some have argued—NAB has been at the forefront in this, and Mr Argus, the chief executive, in particular—that Australia does really stand to perhaps be left behind in this world of international finance if we do not have a domestic operation which is able to match it with the big boys.

It is a question which I think needs reviewing. It is an issue which I think needs addressing. We need to take into consideration as a parliament: what is in the national interest? Is it going to be in the national interest for that four-pillar policy to disappear? Is it going to be in the national interest for the ACCC to ensure that levels of competition are not downgraded by such an act? Is it going to be in the national interest to have a major domestic bank that is going to withstand foreign takeovers? It does seem that one of the issues out there in respect of the four-pillar policy is whether or not Australians would be more prepared to allow two domestic Australian banks to merge than to allow a major foreign bank to come in and take over one of our own.

They are just some of the issues that are around about this very complex issue at the present moment. I do think that on our side of politics—indeed, I think in the parliament as a whole—it is time that this issue received some real airing and some real discussion. Too often and too easily, we as MPs can stand here and, for whatever reasons, kick a bank to death. After politicians, probably banks are the next in line to get kicked to death by the general public. I suspect that a lot of it ensues because of people's memories about interest rate regimes at different times of the economic cycle or because they have been unable to get a loan or whatever.

I have to say that banks underpin every aspect of the economic and social elements of our society. They play an integral role in everything that happens in this nation, as they do around the world. We want to make sure that, as we go into the next millennium, our world-class banking system is able to continue to play a constructive role in the internationalisation of banking services. What we do not want to see is a head in the sand attitude that says to people, `We are too frightened to even examine an issue because we do not think the politics of it at the minute is right.' What we have to do is to say that we want to look at these issues—whether in banking or a whole range of things—to find out what is for the good of Australia.

In conclusion, I would hope that we are not afraid to do that across the parties and across the parliament. I would hope that the decisions that are taken will come after thorough examination of the issues, because nothing could be worse for Australia—nothing could be worse for your constituents in western Sydney or for my constituents down in Wollongong—than to find, under the guise of improving competition or providing an opportunity to buttress Australia against international pressures, a diminution in some way of the way in which services are delivered to our constituents.

That has got to be important. If the banks are really serious about this they need to not only look at a better way of selling the proposition but also take a more pro-active role in ensuring that the services that underpin every aspect of our economic and social life in this nation are delivered fairly and equitably. They also need to understand that from time to time people need to feel that they can walk into an institution and talk to someone face to face about a particular problem.

Let us not be frightened of change. It is always difficult when one embraces change in a general sense. The world is moving so quickly, technology is advancing so rapidly and banking systems are changing so dramatically around the world that we should not be frightened to look at the issues as they might affect Australia generally.