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Monday, 15 November 2010
Page: 2208

Mr ABBOTT (2:33 PM) —My question is to the Prime Minister. I refer the Prime Minister to the 16 separate occasions on which she and the Treasurer have warned the banks about interest rate rises above the Reserve Bank’s increase since the government lost its way in June. I ask the Prime Minister: when will the government find its way by adopting the coalition’s policy on price signalling, which will actually help to prevent unjustifiable interest rate increases and actually help to solve the problem?

Ms GILLARD (Prime Minister) —I thank the Leader of the Opposition for his question because it enables me to advise him that the member for Dunkley has, in the newspaper today, indicated his grand scepticism about the impact of the shadow Treasurer’s plans. So I would suggest to the Leader of the Opposition that perhaps the first thing he needs to do is call together the motley crew he refers to as his shadow ministry and see if they are able to articulate one position. Because there we have it on the pages of today’s Financial Review,and they are all over the place.

Now, whilst the Leader of the Opposition spends his time trying to herd his shadow ministerial cats into one position, what we will do is continue to get on with the business of reforming banking to facilitate competition. What the Leader of the Opposition may not know, because we all know he is bored by economics—ask John Hewson, ask Peter Costello; I think it is very unlikely that he has followed any of these developments—is that the government has already acted to support competition in the banking sector. We acted as the global financial crisis hit to provide financial support in the billions of dollars to residential mortgage backed securities in order to support particularly second-tier lenders and to facilitate competition in the banking market.

We have acted as a government to crack down on unfair mortgage exit fees. These are the fees that stop people going to shop around. When people cannot shop around because the exit fee from their current product is so high, that obviously reduces competition. We are seeing, I believe, a change in the policy settings of some banks about mortgage exit fees because of this government action.

The government is committed to continuing to act to facilitate competition in banking. We are doing that in a methodical way. The Treasurer has been crystal clear about his intentions to do just that, including in his public statements in early October. What we have seen on the opposition side is the shadow Treasurer run out and call for a reregulation of interest rates, and every day since we have seen the shadow Treasurer trying to recover from that statement with increasingly desperate failing around about policy settings, which has drawn sharp criticism in his own shadow cabinet about his economic competence and ability—and actually the Leader of the Opposition on radio refused to back him in when asked. Well, we will leave that disarray for the opposition benches as we get on with the job of facilitating competition in banking.