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Commonwealth Bank rejects the Shadow Treasurer's criticisms of its new fee structure.



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MARK COLVIN:   Has the Commonwealth Bank become the greedy bank?  Labor’s Deputy Leader, Simon Crean, thinks it has.  During Question Time in Federal Parliament, today, the Shadow Treasurer asked the Prime Minister to move against the latest increases in bank fees and charges.

 

SIMON CREAN:   Does the Prime Minister recall telling the Parliament that:  ‘…red hot competition has brought down bank interest rates’.  Prime Minister, is this the same red hot competition that allows the Commonwealth Bank to announce today a $2 fee every time someone wants to take their own money out of the bank over the counter?  Isn’t it one of a new round of fee increases all banks have recently announced?  And Prime Minister, if, as you claim, the banks and financial services sector will be $1.6 billion per year better off under your tax package, why should they be able to impose these new fees now?

 

MARK COLVIN:   Simon Crean.  Mr Howard deflected Mr Crean’s call, highlighting instead what he described as one of the greatest economic gifts delivered by the Government:  lower interest rates.  The Commonwealth Bank has also rejected Mr Crean’s criticism.  The head of the bank’s product division, Neville Cox, told Julie Posetti the $2 fee being imposed on over-the-counter withdrawals, the 30 per cent increase in automatic teller machine withdrawal fees, and the 100 per cent increase in phone-bank transaction fees were justified.

 

NEVILLE COX:   We’ve looked, we’ve obviously reviewed all our transaction fees.  We have not adjusted the over-the-counter fee for four years, almost four years next January, and we’re reflecting more accurately the cost of us providing various services, and we’re in fact looking at where customers are actually doing their transactions and three-quarters of our transactions are not being done over the counter.

 

JULIE POSETTI:   You say that most people choose to do their banking other than over the counter, but isn’t it the people who are most disadvantaged and some of your most loyal customers like aged pensioners, for example, who do the over-the-counter transactions, and aren’t they the ones who are going to be most disadvantaged by this?

 

NEVILLE COX:   Well, we actually specifically look after our … the children, young people to 18 students and aged pensioners and people with disabilities, and we’ve been giving a special rebate to customers to allow them to do three free over-the-counter transactions and we’re increasing the special rebate for those customers to $6 to let them retain their three free over-the-counter transactions which our analysis shows meets their needs.

 

JULIE POSETTI: The bottom line is, though, surely that you’ve made these decisions based on your desire to increase your profit.  This is a money-making exercise, isn’t it?

 

NEVILLE COX:   If we were doing that, we wouldn’t be protecting our pensioner customers;  we wouldn’t be protecting our children and young people, and we wouldn’t be decreasing our costs of doing transactions by EFTPOS.  No, this is a very fair priced banking service that we’ve provided through more channels than we’ve provided in the past;  and giving people choice - we have branch staff who are available to help people, in fact - and we’re quite open about it - work out the way of transacting business that suits their needs and at the cost that is minimal to them.

 

JULIE POSETTI:   Hasn’t the Shadow Treasurer got a point, though, when he asks why banks like yours should be allowed to increase fees when, as he says, they stand to gain a $1.6 billion windfall from the Government’s tax package?

 

NEVILLE COX:   I quite frankly don’t understand that comment and I don’t understand the background to it.  So, I find it difficult to comment about what that really means.  We’re in a business that we need a banking system for all Australians to use.  We open accounts for anybody.  We provide levels of protection for people in terms of ensuring that they can get access to the bank, and we take advantage of our scale and pass those savings back to customers.

 

MARK COLVIN:   Neville Cox from the Commonwealth Bank speaking to Julie Posetti in Canberra.