The Albanese Labor Government is implementing a raft of measures to help Australians get better rates on their mortgages and savings accounts.
The changes announced today will help bank customers get a better deal, including through more choice, lower prices and better services.
They will help create a more dynamic, diverse and resilient Australian banking sector, which is good for consumers, good for industry and good for the economy.
The Government will help Australians find and switch to better mortgage deals and get better interest rates on their savings accounts by agreeing to:
- Make banks tell customers when their interest rate changes on their transaction or savings account and improve disclosure requirements for basic deposit products.
- Require financial product comparison websites to better disclose what determines how products are ranked and the financial relationships they have with recommended product providers.
- Make it easier to switch loans by ensuring customers have direct and easy access to the forms needed to exit a mortgage.
- Work with banks to help improve how customers are notified about bonus interest rate offers and when an introductory lower interest rate period ends, including through the potential development of industry standards.
- Ask Treasury to investigate how behavioural economics and prompts could be used in the banking sector to encourage consumers to switch to cheaper home loans and retail banking products.
These changes will make it easier for customers to find the best deals and switch to them and come in response to two Australian Competition and Consumer Commission (ACCC) inquiries.
The ACCC completed its Inquiry into retail deposit products – commissioned by the Government – in December 2023. It completed its Inquiry into home loan pricing in 2020, which the former Government never responded to.
The changes we are announcing today respond to both inquiries.
The Government is also today announcing a review into the challenges faced by small and medium sized banks led by the Council of Financial Regulators (CFR) in consultation with the ACCC.
The review will focus on the role small and medium sized banks play in providing competition in the sector and the regulatory and market trends affecting them. It will propose ways to improve regulation and ensure that oversight of these banks appropriately balances competition, innovation, and stability.
The review will also assess how smaller banks source funding, including the role of covered bonds, and consider whether regulatory arrangements for new entrants can support additional competition in the sector.
This review follows a year‑long inquiry chaired by my colleague Daniel Mulino, who handed down its final report in March this year after wide ranging consultation across Australia with industry, communities, academia, consumer groups and more.
The Government is grateful for the work that went into the Better Competition, Better Prices report, which recommended looking into regulatory settings for small and medium sized banks.
These announcements build on the Government’s substantial competition policy agenda, including:
- Merger reform;
- Promoting competition in the financial system, including in payments, clearing and settlement and through the introduction of a financial services regulatory grid;
- Improving competition in the supermarket sector, through a review of the Food and Grocery Code, an ACCC inquiry, and funding to CHOICE for price transparency reports;
- Considering the impact of non‑compete clauses and whether there should be restrictions on their use; and
- Reinvigorating National Competition Policy with the States and Territories.
Today’s announcements will help continue to ensure our banking sector delivers for all Australians.