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The bankcard system

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NO. 67




Mr Hayden has made another of his hit-or-miss forays into the „.. .

financial system.

Two weeks ago he was wildly attacking finance companies. Now he is

saying some extravagant things about the Bankcard system.

He seems to have forgotten that the present Bankcard system -

including the interest rate of 18 per cent - was approved by the Labor Treasurer, Mr Frank Crean in March 1974. Five and a half .

years later he suddenly believes it is a rip-off.

He talks of a profit by the banks of $150 million. This figure must be highly suspect to say the least. The total after tax profit

of all the major trading banks from their banking operations in

1977/78 was only about $190 million.

This Government favours the maximum competition possible within the

Australian financial system. That is one of the reasons why we

established the Campbell Committee of Inquiry earlier this year. It will

be the most comprehensive examination of the system in over forty years.

Mr Hayden says Bankcard is a cartel. The Bankcard agreement has been

lodged with the Trade Practices Commission and the parties to it have

sought authorisation under the Trade Practices Act. In the meantime,

Bankcard is operating under an interim authorisation.

■ ■ i:

The Commission administers the Trade Practices Act which is the main

competition statute in Australia. Surely this process v/ill determine whether or not the system is the monopoly Mr Hayden alleges.


CANBERRA 11 July 1979