The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

21 June 2011

Doorstop Interview

Parliament House

21 June 2011

SUBJECTS: Mortgage Exit Fees; Hockey Speech Attacking Costello Mining Boom Spending; European Debt; PBS Listings

TREASURER:

Today in the Senate the Liberal Party are going to try to vote down the Government's ban on unfair mortgage exit fees. This ban gives customers the capacity to walk down the road and get a better deal. At the moment unfair mortgage exit fees are like a big stick which stops customers walking down the street. The fact is this ban makes our banking system and financial system much more competitive. So what we're seeing today is yet another cheap stunt from the Liberal Party and the consequences will be there for Australian families. They will be saddled with unfair mortgage exit fees that make our banking system much more uncompetitive.

JOURNALIST:

Mr Swan, isn't the exit fee ban just partial? They're just saying that they want non-bank lenders to be exempt from it.

TREASURER:

Let's be very clear here, some of the worst offenders are not the major banks. Major banks do have unfair mortgage exit fees, but there are also other operators and lenders in the system that have really large unfair mortgage exit fees that make our system completely uncompetitive. Any model which relies on really large mortgage exit fees is not a good model for the Australian people.

JOURNALIST:

What will it mean for the average family?

TREASURER:

Well, what it can mean for the average family is unfair mortgage exit fees that are in the tens of thousands of dollars in some instances. That means they can't go down the road and get a better deal if they're unhappy with their financial institution. So this is pretty important today and of course what you've got to understand is the Liberal Party are trying to use a narrow period in our Parliament where they can overturn this ban. They would not be able to overturn this ban later in the year. So this is a very sneaky attempt by the Liberal Party in favour of some lenders, to knock out [the ban on] unfair mortgage exit fees.

JOURNALIST:

What do you say to Senators Fielding and Xenophon?

TREASURER:

What I say to them is put the customers first. Don't act in favour of those lenders that are putting in place unfair mortgage exit fees.

Now I just wanted to say a couple of other things this morning as well. We've had a speech from Mr Hockey overnight where he's been I think critical of the economic record of Mr Costello. He has said “Australia has been through commodity booms in the past - though not of this scale - and they've not always been well handled[ ...] The classic mistake has been to let the boom feed into excessive domestic demand and inflation which the authorities have had to belatedly suppress through higher interest rates." What he's really saying there is that the Liberal Party went on a spending spree at the height of Mining Boom Mark I. The consequence was higher inflation and higher interest rates. If Mr Hockey really believes that, he should not be out there trying to wreck the Government's surplus.

The Government's surplus is absolutely critical during this period where we're going into an investment boom in mining to make sure there is not an additional contribution to inflationary pressures in our economy. And Mr Hockey is out there trying to wreck a surplus which is needed in our economy given prevailing economic conditions.

And he also said something else that was somewhat amusing as well. He went out there and said that the mining companies were very profitable at the moment, other sectors of the economy and the business community were not profitable, whilst at the same time he is out there trying to knock over the MRRT. The MRRT will provide a source of revenue to give a tax cut to small business and a cut to the corporate rate of taxation overall. How can you on the one hand go out there and talk about the profitability in the mining sector, the lack of profitability elsewhere, and then oppose a tax cut for the rest of the corporate sector?

JOURNALIST:

We've had some comments from the Future Fund head overnight. Are you worried about Australia's economy given what's happening in Europe?

TREASURER:

Well, certainly events in Europe are of some concern, but fortunately for us we're located in the Asia Pacific and growth here is strong. I certainly hope the European authorities deal with the challenges there, but here in this region growth remains strong and that certainly is a good thing for us.

JOURNALIST:

Should we be cutting medicines off the PBS to look for Budget savings if we're in a strong position?

TREASURER:

Well, look we have given the tick to a large number of new medicines over the past four years to the tune of billions of dollars of additional expenditure. We deal with these matters. They come to Cabinet following the normal process. We deal with them in our Cabinet processes and we'll continue to do that.

JOURNALIST:

But are people missing out on these drugs that really need it? Could lives be saved if you added these to the PBS?

TREASURER:

We have added a lot of new medicines to the PBS over the past few years and I'm sure over the next few years we will add more, but it does come back to this very important point: the Liberal Party are out there trying to wreck the surplus, trying to wreck our savings. That makes it much more difficult to find the room to fund new listings. The Liberal Party can't have it both ways. They can't on the one hand say we should be spending on this, and spending on that, and come into the House and into the Senate and wreck the surplus. Thanks.