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 August 2011

Doorstop Interview

Brisbane

21 August 2011

SUBJECTS: Welcoming the Babies ceremony; new "tick and flick" bank account portability service; Craig Thomson; Queensland economy; truck convoy to Canberra

TREASURER:

Well, this is I think our twelfth Welcoming the Babies ceremony. We've held it every year for twelve years – rain hail or shine, and as you can see today there's still a lot of enthusiastic families here despite the wet weather.

The importance of this ceremony is that we recognise the important role that parents play in bringing up the next generation of young Australians. We celebrate that because parents are doing the most important job in our community - bringing up our young people. So today you can see lots of community groups here that provide support for families and of course when it comes to Government policy, we've put in place a range of policies to support families - paid parental leave, increases in the childcare cash rebate, education tax refund, those sorts of policies have been pretty important.

And today I'm talking about another very important policy which will help take the financial pressure off families when it comes to their bank accounts, because I've received this report from Mr Bernie Fraser – Banking Services Switching Arrangements - and what we are going to do now is we're going to implement a "tick and flick" system which will enable families to easily switch their bank accounts. That is the central recommendation of the report to Mr Fraser and that will be brought in from 1 July next year.

This is a system which will make it much easier for families to switch their bank accounts. They will be free of the burden and the headache of running around and trying to collect all their debits and credits and so on. They'll be able to go to their new financial institution and simply sign one form and that financial institution will go and do all of the heavy lifting to change the account. So the new financial institution will do the heavy lifting, go and do the hard work. We're working with the banks and the financial services sector to ensure this is in place for 1 July next year.

Now this builds on what has been already a very substantial reform agenda. We've abolished mortgage exit fees. We've reformed credit cards. We've put in a lot of reforms in the financial services area to make sure that people can get a better deal. People if they're not happy with their financial institution want to be able to walk down the road and get a better deal. This removes the hassle involved in that process and it's a very significant reform for Australia. So I might leave it at that and hand it over to you.

JOURNALIST:

Will it be able to create more competition in the sector (inaudible)?

TREASURER:

I think we're already seeing more substantial competition in the sector. I certainly think we're seeing more competition when it comes to mortgages as a result of our abolition of mortgage exit fees from 1 July this year. We have put in place a raft of reforms that have seen more competition and I think you can see that just from observing the advertising that is going on now between major financial institutions.

And can I make this point: we've put in place a range of reforms; this is not just about banks, because people out there can go to a credit union, they can go to a building society, they can go to a major bank, they can go to a smaller regional bank. What we've been about is making sure that people have got some choice and there is real competition in the system. For example a number of credit unions have applied to become banks because deposits in credit unions are as safe as they are in banks. So there is a lot more competition out there and people should be shopping around because it hasn't been this competitive for some time.

JOURNALIST:

Are the banks happy to absorb these extra administrative costs? Will there be extra charges?

TREASURER:

No. In fact I noticed Mr Hockey was out there trying to score some silly political points about this report. The title of the report is Banking Services Switching Arrangements and the whole thrust of this report is making sure that people get a better deal. So here what will happen is that the new financial institution's got the incentive to go and pull all of these things together. So I don't see that at all, in fact quite the reverse. This will mean a better deal for families and businesses in the banking system.

JOURNALIST:

So banks won't be able to charge for that service?

TREASURER:

Banks will be out there wanting to do this. They're not going to be out there discouraging people from doing it. If they want to get new people through the door then they've got the incentive to go and do the work. This is a very competitive arrangement.

JOURNALIST:

How many people are you expecting to take up the offer initially?

TREASURER:

Well, we'll have to see. It will depend on the competition that is going on at that stage, but I think from what we have seen in the banking sector, particularly in the last six months and particularly since the Government brought down its package last year, is a lot more competition. More movement particularly when it comes to mortgages, and what we want to see is that extended more broadly.

JOURNALIST:

Do you think Craig Thomson should explain himself to Parliament this week?

TREASURER:

Look I've been asked about this on a number of occasions. I was asked about it again yesterday. Allegations have been made, allegations have been denied. So I think we should let existing processes reach their conclusion. But I made the point yesterday that I'm the Treasurer of Australia and what I spend all of my time doing is making sure that we keep our economy strong, that we do everything we can given the international turbulence that we see to keep our economy strong. That's what I spend my time on.

JOURNALIST:

There are reports this morning that (inaudible) are you?

TREASURER:

I have full confidence in Mr Thomson. As I said before, allegations have been made, allegations have been denied. The fact is that there are some processes in place now. We should await their conclusions. I don't think you can reach any conclusion until those processes have seen their way through and I'll leave it at that.

JOURNALIST:

Figures have been put out today that show house prices in Queensland are on their way back up again marginally. What do you attribute to that and do you think it's a sign that the Queensland economy is back on (inaudible) after the floods and the cyclones?

TREASURER:

Well, there's no doubt that the Queensland economy and the Australian economy took a very big hit from the floods in January this year and also from cyclone Yasi and we saw that in the March quarter National Accounts and that impacted right through our economy. It had a very substantial impact.

Now I think the Queensland economy is picking up. I haven't seen the report today about house prices but I do know that in some of the recent data we've seen we have seen a big tick-up in a number of the indicators about the Queensland economy, so I wouldn't be surprised that that was a result that the Real Estate Institute was talking about today because the floods and the cyclones did have a very big impact on our state. The Australian Government is investing something like almost $6 billion to rebuild Queensland through this year and into the years ahead. That's a lot of money. A lot of people got hurt, a lot of people were in distressed circumstances. There's a lot more rebuilding yet to do and it's good to see that that is flowing through our system.

JOURNALIST:

I know it's a matter for the courts. How confident are you that the High Court will allow (inaudible)?

TREASURER:

I beg your pardon, I can't hear.

JOURNALIST:

How confident are you that the High Court will allow the Malaysian deal to go ahead?

TREASURER:

Look I don't speculate about outcomes in the High Court but the Government is very confident of our position. This is a very important regional arrangement which is aimed at breaking the people smugglers model and if people want to jump on a boat and come to Australia they need to know that they'll end up at the end of a very long queue in another country. So it's not a good thing to come by boat. It's so dangerous and we saw the tragic consequences of that at the end of last year. So the Government remains absolutely determined to break the people smugglers' model and that's what we've got to do.

JOURNALIST:

Will the Prime Minister be meeting the no confidence convoy of truckies that's heading down to Canberra today?

TREASURER:

Well, I'm not aware of the arrangements that the convoy may have made to see people, but it's a free country. They're free to express their opinions in any way they like as long as they do it lawfully. That's one of the great things about Australia.

JOURNALIST:

Does it concern you though that an industry that is very union led is losing confidence in the Labor Government?

TREASURER:

Well, I don't accept the proposition that you are making. The fact is that heavy vehicles…

JOURNALIST:

(Inaudible)… convoy.

TREASURER:

Well, yes and there are a broad range of people involved but I don't accept some sort of notion there that at the core of this is a whole lot of people who are associated with our Government or with the Labor Party. I don't accept that at all. The fact is that heavy vehicles are not in the scheme for two years. So I don't know what they think, but that's a fact. The fact is they're not in the scheme for two years.