Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Transcript of doorstop interview: Mural Hall, Parliament House, Canberra: 22 August 2016: Banking Royal Commission; Turnbull Government's superannuation reform mess

Download PDFDownload PDF




SUBJECT/S: Banking Royal Commission; Turnbull Government’s superannuation reform mess.

SENATOR KATY GALLAGHER, SHADOW MINISTER FOR SMALL BUSINESS AND FINANCIAL SERVICES: Thanks for coming today. The research we have had done from the Parliamentary Library shows that against a backdrop of increasing profits for the major banks we have seen a very large increase in the amount of complaints going to the Financial Ombudsman Service. Those complaints consist of a range of matters but the largest complaints or growth in complaints has been around credit cards, and shows that whilst we are seeing the banking sector perform very strongly as an organisation the customers that it is established to serve are certainly continuing to raise complaints and those complaints are growing over time. We think this is further evidence of the need for a very thorough and systemic review into the banking sector, into the financial services sector more broadly, to understand exactly what factors are involved in this increase in customer complaints. We believe that that is what's needed. We need a strong, profitable, well-led banking system but also one that puts the needs of its customers first and we believe that a Royal Commission is the only way that you're going to actually have the powers and the ability to get, really, to it heart of what some of the issues that have led to the scandals, the rip-offs and the increase in the number of complaints being brought forward by customers. These are not matters that can be dealt with simply by a tribunal which is established to deal with complaints once they've occurred, once the disputes have actually arisen, once the rip-offs or scandals have actually impacted on victims lives. This is about making sure that those complaints are minimised, that we don't have the level of complaints that we're seeing at the moment and that we are ensuring that the banking system is focused very much on the needs of its customers.

I would also just like to make a couple of comments around the superannuation negotiations that appear to be going on. The superannuation reforms which the Government took and put in its Budget, they actually placed them in the Budget and

then went to the election on, are a complete mess. We see comments from the Prime Minister and the Treasurer that these are rock-solid commitments, will not be amended, and post the election we're seeing the Treasurer undertake a national tour of the country to negotiate individually, it seems, with backbenchers who have problems with what the Government is putting forward. One of the strengths of Australia's superannuation system is the confidence of superannuation members and what we're seeing at the moment is that superannuation reform is negotiated via Twitter, via the front page of the major papers as each individual Coalition member who has a problem articulates their problem and calls for change and we've got a Treasurer that's seemingly racing around trying to make compromises where they can. I think in the interests of good superannuation reform, the Government needs to get its act together and needs to bring forward the package of legislation that it intends to try to get through this parliament and they need to talk to the Labor Party about it. Happy to take questions.

JOURNALIST: On credit cards, what are customers complaining about specifically?

GALLAGHER: There's issues around surcharges, there is issues around fees and there are issues around interest rates. Some credit card fees for particular cards, depending on what the card offers, can be as high as $700 and for some customers perhaps they are unaware of these charges, perhaps weren't fully explained at the point of sign-up, haven't fully understood some of the conditions of the credit card, can place people in severe financial hardship. I was visiting a consumer law centre last week and consumer credit cards are the biggest complaint that they get through their door either through the interest being charged, the inability to pay it off or unaware of some of the commitments people got themselves into when they signed up. There's no doubt there are issues with credit cards and we're seeing that reflected in the complaints to the Financial Ombudsman Service.

JOURNALIST: You say we need a strong, profitable and well-led banking system, do you think we have one at the moment?

GALLAGHER: We think there are issues with it. That's no secret. The Labor Party went to the election with a commitment to pursue a Royal Commission and that wasn't taken lightly. That was taken after I think watching a number of problems with the banking industry being raised over a number of years but also wanting to look that when we're going forward that we have the strongest banking system that we can for the future and it is about balancing the needs of the banks, the shareholders, but also, importantly, placing the customers front and centre of that discussion and we believe there's no down side to having a Royal Commission. People can come together, they can provide their evidence, it can be examined, it can be thoroughly and systemically assessed and recommendations can come out that place us in a better position than we are in now. I think, again, a banking system that puts the needs of customers fairly and squarely on the table and I don't think any objective observer watching some of the issues over the last few years can say that's what we've got at the moment.

Thank you.