Today Richard Viney released a very important report into banking. That report has a number of recommendations including that the banks look at more low-cost low-fee accounts, that they only provide credit to those people who can afford to repay debts and that they put in place a three-month protocol for the closure of any rural and regional banks. The Government welcomes the report. We see it as an important step forward in delivering better banking services to consumers. Importantly it is now time for the banks to think not only of their shareholders, but of their customers as well.
REPORTER: What can the banks do Mr Hockey to make the banks actually adopt some of the recommendations
MINISTER: We will be writing to the banks urging them to adopt the recommendations as quickly as possible. With many of the recommendations, there is no reason why the banks cannot adopt them as soon as possible. It is commonsense not to provide people with credit when they cannot afford to repay the debts. It is common sense to consult with local communities before you close a bank branch, and it is common sense for the banks to listen to their customers and to look at how they can provide low-cost, low-fee accounts to those who are most needy in our community
REPORTER: So, basically the Government can do nothing
MINISTER: No, the Government will be doing something. The Government will be encouraging to move quickly on this report. This report has been commissioned by the banks themselves. The banks appointed Richard Viney to undertake this report. The Labor Party did not make any submission. I say again, the Labor Party made no submission at all to this very comprehensive review of the consumer banking. And, so what we are saying is that we want the banks to act first in response to this report before we take any further steps ourselves
REPORTER: So, are you just asking them nicely? I mean, is there anything you can do as a concrete measure to make them.
MINISTER: Well, I think the banks now realise that consumer sentiment is well against them. I think they realise that unless they move quickly to address some of these consumer concerns then they are going to pay a very hefty price. They'll lose customers. They will pay the full price of neglecting consumer needs
REPORTER: There won't be any Government penalty
MINISTER: The Government is not in the business of over regulating banking. We actually have a profitably banking system in Australia, which is a welcome change from 10 years ago when we had banks losing billions of dollars because of Government regulation and because of Government ownership. Today we are saying, in loud and clear terms that the banks have to respond to their customers' concerns. They have to look at low-cost, low-fee accounts. They must start delivering on their rhetoric
REPORTER: Would you support some sort of re-regulating the banking sector
MINISTER: We are not in the business of over regulation. We believe the banks have to respond to consumers concerns. Over regulation has a price. Now, if very profitable banks in Australia are going to start to listen to their customers then they will start to be more profitable, which is a good thing. But if they are treating their customers with contempt as the Viney report is starting to suggest, then they are going to pay a very hefty price.
REPORTER: What are the banks going to do any differently with this three-month protocol in relation to closure of rural and regional branches. What does this mean for people in the bush? What new steps are the banks going to take
MINISTER: Well, it provides people in the bush with an opportunity to convince the banks that their local bank branch can work. Until now, banks have closed branches without consultation in many cases, without giving the local community any opportunity to respond. And so the local community has felt totally disenfranchised by the banks. Some of the banks have responded, some of the communities have responded by joining up with Bendigo Bank to form community bank branches. In those communities, those community banks seem to be doing well. Now, all wisdom does not come out of Martin Place when it comes to banking. A lot of wisdom can come from far flung places in Australia that are struggling with banking services. So, this is an opportunity for the banks to take a deep breath before they close rural and regional branches and to think about what those closures mean for the local community.
REPORTER: Mr Hockey, are we going to see a negative growth figure on Thursday
MINISTER: I am not going to speculate on growth. I am not going to speculate on any economic data.
REPORTER: Do you fear that with a slow down Australia is heading toward .. [inaudible].
MINISTER: I think that the Australian economy is performing very well at the moment and continues to perform well despite the fact that there is a slow down in the United States.