Like many of my Parliamentary colleagues, I always appreciate industry sharing its views on both the challenges and the opportunities that await it.
As a famous Emperor once said:
"Ten people who speak, make more noise than ten thousand who are silent."
I can assure you that when required, John and his team can be quite vocal, but remain conscious of the need to be constructive in their dialogue with Government - which I value.
Credit unions play a major role in providing alternative financial services to Australians, particularly rural and regional Australians. This contribution makes them a valuable — and valued — part of the financial services sector.
As CUSCAL highlighted earlier this year, credit union members consistently report very high levels of satisfaction.
This was backed up by a recent survey conducted by the Australian Consumers' Association.
The survey found that, compared with all other financial institutions, credit unions were the best at keeping their customers satisfied in all three product areas — bank accounts, credit cards, and home loans.
In addition, I understand that almost two-thirds of credit union members don’t pay any transaction or account fees at all.
At the April 2005 CUSCAL Chairs’ and CEOs’ Forum, I emphasised the importance of ensuring a fair and appropriate regulatory environment for all types of financial institutions — including smaller deposit-taking institutions such as credit unions.
On that occasion, I also outlined a number of reform initiatives the Australian Government has adopted, or is pursuing, in this regard.
These initiatives include ensuring that small deposit-taking institutions do not have to bear a disproportionate amount of regulation and compliance costs, and reducing red tape for businesses.
Regulation and compliance costs
For example, we have delivered on our assurance that changes in the financial sector levies framework would not result in increased charges for the smallest financial institutions.
FSR proposals paper
I trust many of you would be familiar with my Proposals Paper on FSR refinements that I released in May this year.
The proposals aim primarily to reduce the compliance burden on financial service providers — without undermining the important consumer protections the legislation provides.
In particular, the proposed refinements are intended to make the disclosure requirements of the legislation work more effectively – for both providers and consumers.
I know that the proposal to refine regulations surrounding the Product Disclosure Statement is of particular interest to the credit union industry.
Credit unions that deal in, or advise on, other financial products will no doubt also be interested in the proposal to streamline the content of Financial Services Guides, and the frequency of Statements of Advice.
We expect this to result in lower costs for providers and more importantly, more meaningful information for consumers.
I expect to release the draft regulations for public consultation very soon, and the final regulations to be in place by the end of the year.
Corporations Act and mutuality
In my time as Parliamentary Secretary, I can certainly say CUSCAL has been an active advocate for its members.
I understand that your industry is concerned about the issue of access to the register of members to show that mutuals are sometimes different from other corporate entities.
This special feature of mutuals is already recognised under law by allowing credit unions a special power to restrict access to their register of members.
The question that CUSCAL has raised with the Government is whether additional restrictions in this area would improve the operation of the market.
We should be clear that this is a very complex issue - an issue that reminds all stakeholders of the importance of getting regulation right. We need to balance the privacy and security issues that arise from a publicly-available members register with general corporate law principles.
The Australian Government is engaging with CUSCAL and other stakeholders on the best method of regulating access to registers of credit union members.
I note ASIC is currently developing its views about the scope of the member register provisions with its recent discussion paper. I encourage CUSCAL to continue to engage in constructive dialogue with ASIC in moving this issue forward.
Conclusion
It is important that Australia maintains an efficient and competitive market. The reforms we are making are helping to achieve that goal.
But in making reforms, the Australian Government understands the importance — to all Australians and to business — of getting regulation right the first time.
Regulation, in this instance, encompasses not just those laws that are made directly by the Government, but also the enforcement policies and guidance notes developed by the regulators in the performance of their statutory function.
I believe that industry can, and should, play a key role in helping us to achieve this, by engaging with us on the effects of proposed regulations.
So, on this special occasion for the credit union industry, I would encourage CUSCAL to continue its dialogue with the Government and equally, the regulators.
In this way, we can all play our part – and make our voice heard - to ensure a competitive and sensible regulatory environment.
I look forward to continuing to work with you.