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Wednesday, 28 March 2001
Page: 25868

Mr KELVIN THOMSON (2:39 PM) —My question is to the Minister for Financial Services and Regulation. Does the minister stand by his statement to the House yesterday, when he said:

The Labor Party ask us what our policy is. Here, this report is our policy ... Wallis.

Minister, is it not true that the Wallis report, which you say is your policy, recommends removal of the four pillars banking policy and no restrictions on bank fees and charges? Now that we know the coalition's real policy on banking, is it any wonder that people say you are governing only for the big end of town?

Opposition members interjecting—

Mr SPEAKER —The Treasurer has not as yet received the call.

Mr COSTELLO (Treasurer) —I thank the Labor Party for its warm welcome. I would be happy to answer any questions if the Labor Party would like to address any to me in my area of responsibility. In the lead-up to the 1996 election, the government announced that it would be setting up an inquiry into the financial system. As I recall, at the time the then Treasurer, Mr Willis, said that the Labor Party would do the same thing if it were re-elected. Unfortunately for him, however, Prime Minister Keating said that he knew of no such policy and reprimanded Mr Willis within 24 hours of the making of that promise. The government went on and commissioned Mr Wallis to produce that report. The reforms of the Wallis inquiry into the financial system were accepted by the government and introduced in full in respect of the setting up of a new prudential regulator, the Australian Prudential Regulation Authority, in relation to extending the consumer protection operations of the then ASC so that it became the Australian Securities Investment Commission. With regard to allowing new competition into the banking system, members of this House may not know that before the government reformed financial regulation, building societies and credit unions could not get access to the payment system because the Australian Labor Party would not allow them to compete fully with banks. Those changes have been recommended by the IMF as a pattern for other countries.

In its response to the Wallis inquiry, the government also announced that it would not be allowing any of the four major domestic commercial banks to merge or amalgamate with each other. That was an announcement of this government. Prior to that, there had been a policy of not allowing superannuation funds to merge with banks. This government changed that policy. It allowed, for example, the development of Colonial and other bank assurance companies. We announced that in our response to the Wallis inquiry and it is the government's position. I noticed the Labor Party the other day coming out and adopting that policy—a policy which it did not invent, a policy which it had not put in place when it was in government, a policy which this government announced and put in place and a policy which the Australian Labor Party has now copied.

We welcome the fact that it has copied that policy. We would recommend that it copy many other of our policies. We welcome the fact that it now appears to be copying our policy on GST. We welcome the fact that it now appears to be copying our policy in relation to the abolition of financial institutions duty and bank account debits tax. I suppose on this side of the House, the best accolade for our policies is the extent to which the Australian Labor Party will copy them and adopt them. For the sake of Australia, I think that would probably be an advisable thing because where they strike out on their own, as the Minister for Financial Services and Regulation said in his last answer, they invariably go wrong.