SUBJECTS: Bank penalty fees, salary sacrificing, political donations, Auditor-General's report.
JOURNALIST:
[Inaudible] …have the banks done the right thing by dropping these bank fees?
CHRIS BOWEN:
This certainly a very welcome step on behalf of Westpac and St George. We think that penalty fees have been too high for some time; the Australian public thinks they have been too high for some time, so this is a welcome step and certainly the other banks need to respond accordingly.
Also, we would like to see further action from banks on fees, including exit fees on mortgages et cetera, which has caused so much community anger.
JOURNALIST:
Will you do anything to encourage them?
BOWEN:
Well certainly we have our unfair contracts law coming into place in January; it has been through the House of Representatives. Our intention is to have it in place by January.
I think partly, not completely, but I think partly the banks have been responding to that coming into force, and that will give individuals and regulators the opportunity to begin action if there is any fee, that is not part of the upfront price, which is regarded as being unfair. And it I think you will certainly see some of those bank fees that have now been dropped, coming in for scrutiny under that new law.
So I think we are partly seeing a response to the Government's actions in that area.
JOURNALIST:
This comes as fixed rates are starting to go up again, how genuine do you think the banks are about bringing down costs? Westpac says this is going to take a $300 million of revenue, but it doesn't seem to affect their share price which is kicking on today.
BOWEN:
That will always be a matter for investors. In relation to long term interest rates they are largely set by expectations as to where interest rates are going around the world, and we are seeing signs of increased interest rates and costs of capital around the world. We are going to see that reflected, and certainly we are going to always see movements up and down in interest rates, but I think the Australian people have been calling for these fees to be reduce or be eliminated for some time, and these are certainly welcome steps.
JOURNALIST:
Why is it that the banks were trying to make up for this with other fees…?
BOWEN:
Well the banks have indicated that they won't do that, certainly NAB made that very clear. I would expect the other banks to follow suit and not do that, and I certainly think the Australian people would make their views very clearly known if that turns out not to be the case.
JOURNALIST:
There are still fees of $9, which they say they are going to hold on to. Choice makes the point that there is no transparency about how much it actually costs them - do you agree that there should be wiped out altogether?
BOWEN:
Well certainly $9 is a lot better than a much higher fee. I think it is appropriate in some instances for the banks to be able to send a price signal that it's important to keep the appropriate amount of money in your bank account to meet your obligations, and so while we certainly welcome the reduction, we certainly welcome NAB's abolition of the fee, some small level of fee if that is set by the banks is appropriate.
Whether $9 is appropriate or some smaller level is more appropriate, customers will determine that by voting with their feet.
JOURNALIST:
Minister I am sure you are aware of the astonishing story coming out of WA in the last few days that hundreds of doctors nurses and other health practitioners have been systematically rorting salary packaging and salary sacrifice to the extent that many people are losing their jobs and the ATO is now swooping on them - are you concerned that this rorting might be more widespread than WA?
BOWEN:
Look I have seen those reports in the media, I am not aware of the details of them. I am sure the tax office is working very proactively with state authorities, that is appropriately so.
As a former Assistant Treasurer I am acutely aware of the dangers of tax evasion and what damage it can cause to the bottom line for governments. And I am sure the ATO is acting appropriately, and the ATO would have the full support of the government in doing so.
I relation to actions taken by the state government's today, that is a matter for them.
JOURNALIST:
Minister, following up Anna Bligh's call to cleanup fundraising in Queensland – do you think Federal MPs, especially Ministers, should be banned from attending business observer programs, as she is doing in Queensland?
BOWEN:
Well look, as a Minister, can I say that I am constantly in contact with business and I have many lunches and meetings with business, and there is absolutely no connection to party fundraising with those lunches.
Both parties have engaged in business observer programs and conferences, and I don't think anybody would suggest that either party, at the federal level, have acted inappropriately in doing so. So I think you are seeing a particular set of circumstances in Queensland which are isolated to Queensland.
More broadly, I think that both parties in government and opposition, it goes for the previous government as it goes for us, have been broadly accessible to business and that business observer program and conferences are part of business interaction with government, but is only a very small part of interaction with government, and Ministers, certainly have a lot of contact with business outside those programs.
JOURNALIST:
What measures have the Rudd government taken to ensure that the rorting of salary sacrificing and salary packaging isn't happening?
BOWEN:
Well we would certainly take the advice of the Australian Tax Office and the Treasury, if there was any evidence that there were more changes necessary. Now it is not necessarily the case that law changes are necessary when you have rorting. What this may well show is that the system works in that the tax office has identified the problem, swooped on the problem, and is taking very appropriate, and indeed in some cases, sever action against individuals - that's appropriate.
That doesn't necessarily mean that law changes are necessary. It may be that in the cold light of day, when all matters are reviewed, that there are some law changes necessary that the Government will consider. Nick Sherry, as the Assistant Treasurer, would bring forward to the government for consideration.
JOURNALIST:
Should the AMA... [inaudible]...
BOWEN:
Well, it is a matter on a day to day basis for Nick Sherry, as Assistant Treasurer, but as a matter of principle we have zero tolerance for rorting.
JOURNALIST:
[inaudible]
BOWEN:
It's always appropriate to respond to emerging circumstances. Of course this Government has taken very significant steps to increase the transparency of political donations; to reduce to more reasonable levels, the amount necessary to declare. We've moved on the tax deducibility of political donations – which the Liberal Party has opposed tooth and nail. So we've certainly taken a lot of steps to introduce more transparency into the political donation process in Australia.
You always have to strike a balance here. Political donations are an appropriate expression of free of speech in a democracy. You can't have a situation where the only people who can afford to become MPs are the people who can afford to fund themselves through their own means. So there is always a balance to be struck. The appropriate mechanism is transparency and that's what we've been doing.
JOURNALIST:
But you've made the point that you're accessible to business anyway. Business people have made the point to me that the Ministry is accessible to them. Purely because of perceptions why have business observer programs charging $7,500 been? Certainly there are other opportunities…
BOWEN:
I think that every business person in the country knows that they don't need to pay $7,500 to see a Minister. What they pay $7,500 for is to see the Conference in process; and to see the Labor Party's and Liberal Party's decision-making mechanism in full swing and that's what they pay money to see.
JOURNALIST:
Did they get value for money?
BOWEN:
I'm sure they'll determine that when they decide whether to come again. But we certainly do our best to entertain in a responsible, calm and rational way which befits the government of the nation.
JOURNALIST:
Anna Bligh says while there's nothing untoward, there's a public perception that people are too close and things can go wrong there. Is there a public perception?
BOWEN:
Well, I think we've certainly seen in Queensland a particular public perception build up and there's been particular comments in relation to Queensland. Now I'd stand corrected if you can correct me; but I've not seen any comments in relation to the Federal Government and indeed to other State Governments. So while certainly Anna Bligh is correct in pointing out a perception issue in Queensland, I don't think that's widespread.
Of course the system federally is transparent: Ministers are clearly available to business groups and individual businesses and individual business people who want to talk to the Government about issues which are important to them. We're extremely accessible, a number of people have commented to me on the level of accessibility that this Government generates and so I don't think that you'd see this perception at the federal level.
JOURNALIST:
John Faulkner obviously disagrees with you, he thinks there is a perception problem meeting with business and accepting money for his time. Do you disagree with him?
BOWEN:
I don't think that's a fair characterisation of Minister Faulkner's actions. He has declined to meet with, as I read in the papers, an individual business because he felt that, that was an inappropriate thing to do in those circumstances and there are times when other ministers take that particular view. There are times when I take that view. If a business is involved in a tender, then we don't meet with them at Labor Party Conferences, or anywhere else; and I think Minister Faulkner has shown a similar level of judgement with that particular issue and that just underlines the point that the Federal Government is accessible; but that we have the appropriate mechanisms and safeguards in place to ensure that all conduct is, not only, completely proper, but seen to be completely proper.
JOURNALIST:
Minister, you would have heard Peter Costello's comments this morning about the Liberals needing a better narrative, do you agree with that?
BOWEN:
Well I think the Liberals need a better policy and they need to support the Government's actions to see us through this global recession. So, if Mr Costello is calling for better policies, than I would agree with that. If he's only calling for better packaging with the same message then he's on the wrong track.
JOURNALIST:
Would you be worried if they succeeded in begging and persuading him – Peter Costello – to come back?
BOWEN:
No.
I might just make a few quick comments – if I could – on the Auditor General, which I understand the Auditor General's report into the John Grant matter will be released in coming days.
Now you might recall that Mr Turnbull accused the Prime Minister of Australia and the Treasurer of Australia of lying and using their office to support a Labor mate. Now unless he's backed those claims up with evidence to the Auditor General and unless the Auditor General makes a similar finding, then Mr Turnbull's position is now untenable.
Mr Turnbull has had several weeks to come forward with evidence. He's also had several weeks to reveal to the Australian people what role he played with Mr Grech; and what role Senator Abetz and other senior Liberals played with Mr Grech in the lead up to that Senate Inquiry.
Mr Turnbull was very quick to make accusations a few weeks ago. He's been very slow to come clean about what he sees as the evidence which justified him calling for the resignation of the Prime Minister of Australia. This is his opportunity – the release of the Auditor General's report – to fix that problem and to come clean with the people of Australia.
JOURNALIST:
Have you or other Ministers seen the draft copy of that report?
BOWEN:
I certainly haven't.
JOURNALIST:
Do you know whether the Treasurer has, given that he's the Minister?
BOWEN:
Well…
JOURNALIST:
Actually, the Finance Minister is the Minister so do you know whether either of them has seen it?
BOWEN:
I don't know.
JOURNALIST:
Given that the audit could have findings about the way OzCar is structured as a scheme; do you commit to act on, as a government, to act on any findings of the audit in terms of finetuning the scheme, or even scaling down the scheme?
BOWEN:
We certainly always take the Auditor General's recommendations very, very seriously, give them very serious consideration and need very good reasons not to adopt an Auditor General's recommendations.
JOURNALIST:
Who's running the scheme now that Godwin Grech has disappeared?
BOWEN:
The Treasury and there will be an officer in the Treasury at the appropriate seat.
JOURNALIST:
Can you be more specific about exactly when the report's going to be released.
BOWEN:
I don't know, it's a matter for the Auditor General. I understand the Auditor General chooses the timing of the release of his own reports, but I've read the reports which many of you have written that it's due in the coming days.
Thank you.