Thank you, John [Brogden] for that kind introduction.
I would also like to thank Senator Marise Payne, the Parliamentary host of this function; and acknowledge my Ministerial and Parliamentary colleagues (from both chambers and parties) who are here tonight.
Also I would like to acknowledge CEOs Adrian Lovney of Abacus and John Gilbert of Cuscal Limited and its Chairman Rob Nicholls; and of course, you, the industry representatives, who have travelled to our great nation’s capital, to celebrate the achievements of the mutual sector in recent years and to reflect on how they can position us for the future.
When preparing my notes for this evening’s remarks, I thought it would be instructive to look to where we were two years ago, when this Parliamentary function was last held and I gave an address to what was then the CUSCAL cocktail function.
The first thing that struck me was that in 2005, the industry did not have one body to represent it - but now in Abacus, you certainly do.
So please let me congratulate the industry on this significant development, which I know has come about with concerted and determined efforts.
Could I therefore extend my welcome also to the Abacus Board, which I understand is here this evening for its first ever formal Parliamentary function in that capacity.
It always gives me much pleasure to address the mutual sector. I believe it is a sector that contributes in a highly effective way to the advancement of public policy.
This is evident in the contribution the sector is making to such issues as the reduction of red tape in the financial services sector, the design and implementation of the anti-money laundering legislation, and of particular significance to you, the protection of the member register.
It is a credit to your sector that in your discourse with the Government, you have always attempted to speak with one voice. The establishment of Abacus formalises the facility with which this voice can be projected and just as importantly, heard.
From my experience, I cannot overstate the importance of industry engaging with any government, indeed with any level of government, with the one voice.
And I think it is timely to repeat what I said to the industry at this function two years ago, when I quoted a famous Emperor who said: “Ten people who speak make more noise then ten thousand who are silent”.
I think, looking back over the last two years, that the mutual sector has shown it understands the message underlying these words. This is most evident in the way it has held itself in discussions about member’s registers.
When the mutual sector approached the Government about concerns it had with access to its member registers, it spoke clearly, and with one voice.
The sector highlighted the uniqueness of the member register of mutuals compared to other corporates – being that a mutual’s register also serves as its customer list and it highlighted the different perspective that was thereby lent to issues like privacy and personal security of credit union and building society members.
Back in 2005, I heard that voice and stated that we would work with industry to determine the best method of regulating access to their registers.
By working together the Government has, I believe, delivered a solution to this issue.
The solution provides for a fair and appropriate balance between the unique position of mutuals and their registers, and the general principles underpinning corporate law.
The member register regulations have now been finalised and have commenced. The new rules will protect the security of your members’ names and addresses – you will not be required to release that information to outside parties.
The framework we have put in place also empowers you to ensure that your members do not receive misleading or illegal information, and also provides a mailing house mechanism for lawful contact with members, managed by your Boards.
So I think we can certainly say we have achieved some good things over the two years since we last met.
But what about the years ahead?
The Government is committed to reducing the burden of red tape.
I hear you when you say that some things can be done better and that we need not always look to legislating in order to solve issues.
Now that the Simpler Regulatory System Act has taken effect, I think we are all on new and promising territory and that the voice of industry can be heard by policy departments, regulators and governments, before we in Parliament rush to legislate what we think is in the interests of all Australians.
I believe that in areas such as ASIC’s examination of its PS146 training requirements, AML and Basel II, the voice of industry has been and should be heard, and I would encourage you all to ensure that it is.
But there are other important policy implementation issues that lie ahead.
Abacus, I know, is conscious of the opportunity it has, especially in this new environment, to ensure that co-regulatory approaches to issues confronting the sector can work effectively for the benefit of your member customers.
I have always believed that this is one of the best ways to guard against unnecessary red tape.
For this reason, and because I also think it is critical to put customers first whilst acting as responsible lenders, I welcome John’s [Brogden] news that a new Code of Practice is expected by December this year.
In relevant areas across the financial services sector, l hope that we can achieve together, a harmonised regulation regime for mutuals that is balanced and competitive and appropriately recognises mutuals.
One further challenge I’d like to refer to is the challenge of being ‘too good’. Because your industry performs so well, mutuals can readily become an attractive target for competitors.
Can I say that I believe competition in general is a good thing?
Competition is no doubt one of the key things that has driven you to perform very well in customer satisfaction surveys.
You have the highest levels of customer satisfaction in the market, and deliver impressive growth rates (10 per cent on average over the last 10 years and over 4.5 million customers).
But can I also say that I am aware of concerns about takeover regulations for mutuals and therefore have undertaken to work with Abacus to review them.
Credit unions and mutual building societies are important players in the financial services market. They deliver competition and choice, provide essential banking services to 4.5 million Australians, contribute to communities, and have a strong track record as responsible lenders and promoters of financial literacy.
You are a strong and vibrant industry. Your strength and size is demonstrated in the range of institutions represented here tonight.
I thank you for working with Government with the one voice.
It has aided an efficient, open and constructive dialogue on many critical issues that matter to your members.
I hope that that voice – the voice of Abacus – continues to be a positive influence in the policy debates yet to come.
Thank you.