This week's economic note comes to you from Brisbane, following a week of meetings with business people and community representatives right around the country; from Perth and Adelaide, to Sydney and Melbourne. While in Perth, I also got to drop in for a few minutes to wish Ricky and the boys all the best before the Ashes test that many of you probably have on while you're reading this note. More importantly, I had the opportunity to talk with business and community groups about the government's reform agenda, in particular, the package of measures I announced last Sunday, to deliver a Competitive and Sustainable Banking System. There was broad support from the community for our efforts to deliver greater competition in the banking sector, whether it be through helping smaller lenders compete, fostering a corporate bond market or making it easier for consumers to shop around. My meetings with business and the community sector gave me an appreciation of the two-speed nature of our economy, but regardless of where I visited, the constant message was just how strong jobs growth had been, with 400,000 jobs created in the past year.
The secret to Australia's success during the financial crisis was that we never lost sight of what our economy would need during the recovery and beyond – and for some time a more competitive banking system has been central to our plans. Last Sunday, I announced three broad new streams of reform to get a fairer go for all Australians in the banking system by empowering consumers, helping smaller lenders put more competitive pressure on the big banks, and securing our financial system so it can continue to provide a sustainable flow of credit to households and businesses.
These reforms are all about building up more competition in the banking sector over time, to keep the big banks honest, by making it easier for customers to walk down the road and get a better deal if they aren't getting the most competitive offer. Of course, there's no silver bullet here – the global financial crisis created some huge challenges for banking competition because it hit smaller lenders particularly hard. We can't fix all of this overnight, but I'll keep working hard to give all Australians a fighting chance in the banking system.
I was really heartened to see our plans for the banking sector receive such strong endorsement from smaller lenders, consumer groups and small business. ABACUS, the industry body for mutual credit unions and building societies, said the package was 'the start of a real change in banking – one that will work for consumers, and bring back competition'. Leading consumer group Choice said 'the Government's proposals would make it easier for consumers to switch financial institutions and help smaller lenders to challenge the Big Four'. Choice said the Government had 'listened to consumers by putting in place measures that would help them get a better deal' with reforms that 'could mark the start of a major shift in banking – placing more power in the hands of consumers'. Australia's peak small business body, ACCI, called on industry to 'get behind' the Government's reform plan. Regional lender, Bendigo and Adelaide Bank, said the reform plan was positive for smaller and regional lenders, particularly our new $4 billion investment in RMBS, our measures to make switching easier and the introduction of covered bonds.
This strong level of support, together with the opposition of the big banks, their backers and a range of vested interests, gives me all the evidence I need to know that our three new streams of reform will help Australian families and small businesses get a fairer go. Australia has a proud history of economic reform despite strong resistance at every turn from those who seek to disguise self-interest as national interest. This was true when the Hawke and Keating Governments laid the foundations of our modern and competitive economy by bringing down the tariff wall, floating the dollar, introducing national competition policy and compulsory superannuation – and it remains true today. I'll keep working hard in the interests of every Australian family and small business to make the banking system work for them, and not for the insiders whose only agenda is to profit at the expense of the hard working people who make our economy strong.
Another key plank in our economic agenda is to ensure that, after years of hard work, every Australian can leave work with sufficient funds to comfortably enjoy their hard-earned retirement. And so on Thursday it was great to see Bill Shorten announce our Stronger Super reform agenda which provides a comprehensive response to the Cooper Review of the Super System. The reforms we have announced will deliver Australians more money in retirement. The Stronger Super package includes the introduction of a new low-cost and simple default superannuation product called 'MySuper'; greater duties for the professionals who manage our super; and measures to make it easier for Australians to locate lost superannuation and consolidate multiple accounts. An Australian worker, currently aged 30, can expect up to $40,000 more in retirement as result of the 'Stronger Super' package.
We are also determined to ensure Aussie consumers and small businesses are getting a fair go in the retail sector. That's why, yesterday, we announced an inquiry into the future of retail by the Productivity Commission, and a compliance campaign to crack down on people or businesses rorting the $1,000 low-value GST threshold. In its inquiry, the Commission will examine drivers of structural change in the retail sector including globalisation; increasing access to the digital economy; the exchange rate; and broader issues posed by an increase in online purchasing. The online marketplace offers big opportunities for Australia, providing more choice and competition for consumers, and giving our retailers access to more potential customers. The Productivity Commission inquiry will provide a valuable insight into the challenges faced by the Australian retail sector in a globalised shopping world, and lay the foundations for a vibrant Australian retail sector for the next 25 years.
As 2011 draws closer, I have been spending a bit of time looking back over the year and whilst it has been another very difficult year for the global economy, Australia has been a standout performer. Our economy is strong, unemployment low and businesses are gearing up for record investment for the future. While other countries are still struggling to recover the output lost during the global economic crisis, we've grown our economy by almost 5 per cent from its pre-crisis levels. And even though the year's not over yet, it seems likely that in 2010 we will see the biggest number of jobs created in a single calendar year ever, and that's despite the headwinds we're still facing from abroad. But we're not resting on our laurels; we have lots more to do to ensure Australia stays ahead of the pack and that we can create more and better jobs for all Australians. That's why we're determined to keep improving our infrastructure and broadband; building national savings through superannuation; improving our tax system; and investing in the skills of our workforce.
With Christmas next weekend, this will be my final economic note for 2010. I'll be taking some time off with my family over Christmas, first in Yass where my wife grew up, then off to our annual family holiday spot on the Sunshine Coast. I'm looking forward to a bit of time off, but am also eager to get back to deal with the challenges and opportunities 2011 will throw at the Australian economy. Thanks to all the readers out there and you can expect to see me back reviewing and commenting on the economy in my weekly note, starting again on January 23.
Deputy Prime Minister and Treasurer of Australia
Sunday 19 December 2010