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Monday, 22 September 2008
Page: 8204

Mr JOHNSON (8:11 PM) —I am very pleased to support the motion by my friend and colleague from Queensland the member for Maranoa because I know that the people of Ryan would be very warmly supportive of the spirit of his fine motion. I want to specify on the record for the people of Ryan that the motion is about amending legislation to prevent credit providers from sending unsolicited letters offering an increased limit to credit card holders and to note that amended legislation would stipulate that, for a credit card limit to increase, the cardholder must make the first approach to the credit provider.

Let me say very strongly that, as someone who believes in free enterprise and the place of businesses in our system, I appreciate and respect the role of banks in our community. They are an important part of our economic architecture. I also want to make it very clear that I do not support extreme capitalism and I do not support exploitation by any business, including banks. Governments must have a role in consumer protection. This extends to protecting consumers from over-enthusiastic bankers.

My father used to say to me, ‘Son, neither a borrower nor a lender be.’ Maybe this has some merit but, of course, in our modern system people need credit and banks are one source of that credit. Banks are very profitable in this country. They are global businesses as well. They rest very much on the mums and dads in our communities all over the country. They rest very much on their profit from ordinary people—from people starting businesses to young couples who might have just got married and are looking to buy a car or a home. So banks have a very strong place in our society. A tool through which young people and all kinds of consumers are to exercise some economic freedom is credit cards. Credit cards are very much a part of our lifestyle. Many of us would almost say that they are an indispensable tool but, at the end of the day, this piece of plastic is potentially very dangerous to people who do not fully understand and appreciate its power. I call on the federal government and on all legislators across this country, particularly here in the House of Representatives, to take a very considered view of this motion. It will protect people who might be vulnerable or somewhat exposed to the heavy hand of some banks and bankers who might try to take advantage of certain consumers.

I have received many letters from various banks seeking me to be their client and from the bank I do business with to increase the limit on my credit card. Very wisely, I declined to do so. I thank my beautiful and lovely wife who in particular says to me, ‘Michael, be careful of banks.’ She is a very wise and lovely person and makes sure that I fully understand how banks might be trying to take advantage of me as a consumer because I do not take much notice of financial matters.

I want to point out to the people of Ryan that the banks in this country are certainly doing very well and enjoying great profits. That is why I remind the banks that, in the spirit of good business practice and their important role in our society, they should appreciate the position that they have versus the position of consumers who might not be as aware of the relationship between the two stakeholders.

I want to draw the parliament’s attention to the profit of the Commonwealth Bank. The net profit after tax on a statutory basis increased seven per cent to $4,791 million and on a cash basis by five per cent to $4,733 million. In the short time left to me, I will point out that the Westpac bank in its press release on 1 May 2008 announced cash earnings of $1,839 million for the six months ending 31 March 2008, up 10 per cent. After including significant items, the net profit after tax was up 34 per cent to $2,202 million for the six months. So they are two successful banks. I congratulate them on their profits but also remind them very strongly that they would not survive without the hardworking Australians who bank with them and therefore that they should take care of their customers.