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Tuesday, 22 February 2011
Page: 918

Mr HOCKEY (3:35 PM) —I move:

That so much of the standing and sessional orders be suspended as would prevent the Member for North Sydney from moving the following motion forthwith: That this House notes with deep concern the release of 25 secret Treasury documents contradicting the Treasurer about the impact of its proposed banking package including:

(1)   claiming on 12 December 2010 that the package would “build up competition in our banking system” when the secret Treasury advice demonstrates that the absolute opposite is true;

(2)   claiming on 12 December 2010 that the banking package would “ensure that interest rates are lower over time” when in the secret Treasury advice again the absolute opposite is true;

(3)   for failing to heed the warnings of the Treasury that “there are a lots of risks and sensitivities associated with banning exit fees” including higher interest rates, higher bank fees and less transparency in banking;

(4)   for failing to heed the warnings of the Treasury that the Treasurer’s banking package “could disproportionately impact first home buyers”; and

(5)   for failing to heed the warnings of smaller financial services providers such as Aussie Home Loans, Bank of Queensland and Suncorp Metway that the banking package may reduce banking competition and lead to higher overall costs for consumers.

Everything this Treasurer touches turns to mud. No wonder he scurries away. He has no ticker to defend government policy. What he does is set up his so-called mates. He set up his so-called mate from Nambour with a mining tax that was a dud. He set up his so-called mate from Nambour with a war on inflation that never occurred. He set up his mate from Nambour with a program of spending that was, on an international scale, lauded as probably the biggest package in the world. He is now setting up his mate from—

Ms Julie Bishop —Lalor.

Mr HOCKEY —That is right: his mate from Lalor. I am choosing my words carefully and I apologise for embellishing the term ‘mate’. He is using his office to set up the member for Lalor with a mining tax, a carbon tax, a flood levy and now a banking package that his own Treasury says is flawed.

Late last night, 25 documents in relation to banking were released by the Commonwealth Treasury. It followed a freedom of information request from the ABC. Of course, as Treasury does these days, in what seems to be a relatively new practice, whenever a media organisation requests documents through FOI, in order to kill off media interest the Treasury then releases the information publicly at the same time. Mr Nick Loan, manager of the bank competition unit, in relation to the government’s own banking package, says:

In short, there are lots of risks and sensitivities associated with banning exit fees …

He goes on in numerous ways to outline exactly why the government’s own banking package may increase interest rates. You remember the front page of the Australian: ‘Banking overhaul will bring down rates: Swan’. I happen to know that the Treasurer was not very happy about that. This will come as a rude shock. I understand there was an extensive complaint from the Treasurer about the treatment by the Australian of that issue. But, because I am a thorough guy, I went back to 12 December, the day before the story, and checked what the Treasurer actually said:

… this package is all about helping the customers, helping households, and helping business so that we can build up competition in our banking system which will ensure that interest rates are lower over time.

That was the Treasurer of Australia who said that. I want you to listen to this, Swanny—don’t let me off the hook here. He said that interest rates would be lower and competition would be greater.

Let’s go to what the Treasury advice says:

The banks’ costs of early termination are likely to be recouped by a combination of higher up-front fees and interest rates …

This is the Treasury advice specifically on the initiatives that he talked about. So you have the Treasurer out there saying interest rates will come down because of these changes and you have the Treasury saying, ‘No, interest rates are going up.’ The advice says:

Were existing customers to seek a new provider following an out of cycle rate rise, they would still, at least initially, face the same barriers to switching …

The official from Treasury goes on to say:

… mortgage providers will need to find alternative ways of covering their costs, which could lead to a range of unintended consequences from the Government’s action that could outweigh the benefit of the ban.

These include: (1) increasing interest rates, (2) increasing other fees, (3) reducing the transparency of bank fees and (4) a disproportionate impact on first home buyers. He goes on to say that the decision of the government may adversely affect smaller institutions such as credit unions and building societies:

… more than the major banks, and therefore reduce the ability of credit unions and building societies to effectively compete.

These are damning words. This is an advice to the Treasurer dated 13 October 2010.

In doing this, the Treasury itself has belled the cat. The Treasury itself has pointed out that this Treasurer is a fraud. He makes promises he cannot deliver. He makes commitments to the Australian people that he knows cannot be delivered. In fact, he received advice not just from Treasury; he received the advice from Aussie Home Loans, from Mark Bouris, from the Bank of Queensland, from Suncorp Metway and from Westpac.

Do you know what? If this Treasurer were half smart—and God forbid that we should have a Labor Treasurer that is half smart, but if he were half smart—I would say to the Treasurer: why is it that on the first trading day after he announced his banking package the prices of the major banks’ stocks went up? It is because he established and laid out a package that benefited the major banks and, at the end of the day, it actually hurts the people most vulnerable. It hurts bank customers because their fees are going to go up. It hurts the borrowers because their interest rates are going to go up. It hurts competition, because the small banking players have said, ‘This package will hurt competition.’

This is a damning indictment of an incompetent Treasurer. This is a damning indictment of a man who is not fit to be the Treasurer. Not only is he not up to the job and not only does he make mistake after mistake. How many versions of the mining tax are we going to have? We had the Ken Henry version, we had the Wayne Swan version and we had the Julia Gillard version. Now we are going to have the Green’s version and then we will have the mining companies’ version. Sooner or later, someone will say, ‘Mate, do you get anything right?’ No wonder Julia Gillard rang up Peter Costello and said, ‘Can you deliver the budget next May?’ just as she rang up John Fahey and said, ‘We need you to oversee Wayne Swan, the Treasurer, in Queensland.’ I bet old Swanny—I bet the Treasurer—did not even know that John Fahey was going to be appointed. Can you imagine the conversation? ‘Ah, Wayne, I tried to call you that day.’ Yeah, right. That is why John Fahey is being called in to oversee the Queensland flood reconstruction.

A whole lot of issues have come out of these 25 documents. Not only on 13 October did Mr Loan—ironically named—point out the flaws; he did it on 6 October, when he said:

Banks are likely to move to recover the legitimate costs associated with establishing a mortgage—

and could ‘penalise consumers’ who do not want to switch.

There is document after document and all the proof you need about a Treasurer that is incompetent; about a Treasurer that is a follower and not a leader; and about a Treasurer that is pushing up interest rates, pushing up the cost of banking and reducing competition—and, at the end of the day, proving to Australia and sundry that this is a man not up to the job of Treasurer.

The SPEAKER —Is the motion seconded?