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Wednesday, 4 November 1992
Page: 2544

Mr LES SCOTT (12.41 p.m.) —I thank honourable members for giving me the time to say a few words on the Banking Legislation Amendment Bill. Like my colleagues on this side of the House, I particularly welcome the initiatives taken in the amendments before us. The record of both the Hawke and Keating governments in reforming the banking system over the last decade has been very important, and it certainly has been very important to international competition. I welcome the initiatives taken by the Treasurer (Mr Dawkins) in this Bill in allowing foreign banks now to have branches in Australia for the wholesale banking sector. I think it is important that that is restricted to the wholesale banking system and that foreign banks continue to need to have subsidiaries in the retail sector. I think that is important for the protection of consumers' deposits in the retail area, and it was obviously very well debated during the Martin inquiry.

  The Labor Party's record in government is outstanding as far as the banking industry is concerned. What concerns me is what could happen under some of the proposals that the Opposition is putting forward. I was interested to read in last Friday's Australian Financial Review that the Australian Bankers Association has expressed grave concerns about the impact that the Opposition's proposed GST would have on the banking system. Obviously the banks have been through a rough time over the last few years, and a lot of that was through their own fault in not being able to handle deregulation as well as they ought to, but they are coming out of that. Some things still need to be dealt with as time goes on.

  The crazy part is that while they are coming out of that period we have the people in the Opposition running around trying to cause extra problems for them which would result in massive losses to the banking industry. We know what would happen if the banks started going backwards with their profits even more than they have over recent times: they would be passing that on to the consumer. Of course, what that would add up to is increasing charges and interest rates for Australian consumers. It would be a negative way to deal with things, with the GST particularly. The Opposition has offered to exempt the banking system, but that would backfire in the end. That is what it comes down to. It would not work at all and would clearly result in added costs to the consumer. It is something that we need to be very careful of.

  The amendments before us continue the response that we have been making as a government. I am sure the banking industry would welcome these initiatives here and that they would give it the confidence to move on to bigger and better things. Clearly, as the honourable member for Parramatta (Mr Elliott) said before, we need to do much more in the international market when it comes to banking to be able to trade more effectively in services. I think the honourable member for Macarthur (Mr Martin) has said before that we should be trying to enhance Australia as a financial centre for this part of the world, and that can only help the export of our services from time to time. Mr Deputy Speaker, I thank you for your indulgence.

  Mr DEPUTY SPEAKER (Hon. J.D.M. Dobie)—Order! The time allotted for the remaining stages of the Bill has expired. The question is that the Bill be now read a second time.

  Question resolved in the affirmative.

  Bill read a second time.

Mr DEPUTY SPEAKER —Order! The question now is that the remaining stages of the Bill be agreed to.

  Question resolved in the affirmative.

  Bill read a third time.

Sitting suspended from 12.46 to 2 p.m.