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Costello fails to understand issues in consumer banking.

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Laurie Ferguson Shadow Minister for Consumer Affairs Shadow Minister for Population Health and Health Regulation

19th of May 2006

Costello Fails to Understand Issues in Consumer Banking

The Federal Treasurer is strangely out of touch with what Australians are thinking when it comes to banks fees. In view of sky-rocketing bank fee profits and the continued forced migration of consumers to electronic payments methods, the Treasurer has again failed to understand that the key issue for consumers is the actual cost of transactions.

Shadow Minister for Consumer Affairs, Mr Laurie Ferguson said “Australian consumers continue to suffer under the mounting costs of bank fees and charges”.

Reserve Bank of Australian statistics show that the banks’ fee income from households increased by 7 per cent in 2005 and by an average of 15 per cent in the period between 1999-20004.

Mr Ferguson said “these rates of increase in bank fees are spiralling in an unchecked manner and require the urgent attention of the Treasurer. The Treasurer has acknowledged that banks are making “unbelievable profits” and hence rather than watch in awe as Australian consumers are being gauged out of their savings, he should deal with the issue and ensure that consumers pay a reasonable and fair price for an absolutely essential service” . “Under the Howard Government Australian consumers have been hit hardest in the area of banking fees and charges. Not only have banks been allowed to close thousands of bank branches without so much as ‘boo’ from Howard or Costello,

indeed, they have slugged consumers by ever more creative means. Banks now make almost as much of their profits from dipping into the small bank accounts of ordinary Australians as they do from their investments and lending”.

Mr Ferguson said “A Labor Government will pressure the banks to offer low fee and other value for money products to consumers”.

Contact: Khaldoun Hajaj 0404078692