JOSH FRYDENBERG:
The Australian financial services sector is 10 per cent of the Australian economy, employs more than 400,000 people and the products and the services that it generates provide important support to Australian families and businesses. Now, Australian consumers expect their banks to do the right thing. Australian consumers need their banks to do the right thing. And it’s deeply disappointing that the banks have not passed on in full the latest rate cut. Indeed, they ignore the advice of the independent Reserve Bank of Australia and thumbed their noses at Australian consumers.
The last three rate cuts have totaled seventy five basis points. The banks have passed on fifty seven basis points of that. If you’re an Australian family with a $400,000 mortgage, this is the equivalent to a savings of a bit more than $1,500 a year in lower interest payments. But we need the banks to do more and the only way the banks will do more is if Australian customers vote with their feet. I encourage every Australian bank customer to approach their bank and seek their best possible deal. And if they don’t get the best possible deal, to take their business elsewhere.
Five of the smaller lenders passed this rate cut on in full. But the big four did not. So, now it’s up to Australian customers to seek from their banks the best possible deal and we’re encouraging them to do so, and indeed, enabling them to do so with the passage of the Consumer Data Right which will make that ability to go and seek the best possible deal that much more easier.
The other issue I wanted to comment on was the belated recognition by Bill Shorten that he is to blame for Labor’s election loss. Well, Anthony Albanese can’t get off that easy because Labor may have changed their leader but they haven’t changed their policies. Labor may be trying to change their language but they haven’t changed their tune. Labor is still the Party of $387 billion of higher taxes; higher taxes on your housing, higher taxes on your superannuation, higher taxes on your income, higher taxes on retirees, higher taxes on family businesses. They were the taxes the Labor Party took to the last election that are still the Labor Party’s policy. These are the policies that Jim Chalmers said he was “proud” and “pleased” of. These were policies that were targeting the so-called “top end of town,” which Jim Chalmers and Chris Bowen, Bill Shorten and many others talked daily about.
The fact is, the Labor Party will always be the Party of higher taxes; higher taxes to chase higher spending. And could you imagine what would be happening to the Australian economy right now with the challenges we face with drought and international trade tensions if Labor was trying to implement their $387 billion of higher taxes? It would lead to less jobs and to weaker economy. Are there any questions?
QUESTION:
There was a report today that the banks have got to an extra $14 billion a year because they refuse to pass on the full cuts since 2011. What should those banks do with that money? Should they pass that back onto customers now? Do you want to see those full cuts sort of retroactively applied or how can we get some of that money flowing back into the economy?
JOSH FRYDENBERG:
Well, banks should never be increasing their profits at the expense of their customers. And by not passing on these rate cuts in full, that is effectively what is happening. Because the RBA has said that the costs of funds for the banks has come down and come down substantially. And the RBA Governor was calling as recently as days ago for those rate cuts to be passed on in full. And the banks have ignored him and ignored their customs. And so those rates that the banks are offering should have come down in full reflecting that RBA cut, the most recent of which was a twenty five basis point cut.
QUESTION:
Do you think, though, that the Parliament needs to pass laws or make some changes to legislation to give you the power to whack the banks to force them into doing this?
JOSH FRYDENBERG:
The best way for the banks to get the message is for customers - for Australian families, for Australian businesses - to seek the best possible deal and if they don’t get it from their existing credit provider, then to go elsewhere. As of yesterday, someone approached me on the street and told me that they’ve taken their business away from the big four to a smaller provider because they simply are fed up with the banks not providing the best possible deal to their existing customers.
QUESTION:
Labor is proposing a higher bank levy for the big four, would you consider that?
JOSH FRYDENBERG:
Well, Labor’s answer is always more levies, more taxes, that’s their default position for every challenge. Well, ultimately, we’re focused on getting the customer the best possible deal and the customer can do that by looking in the market place but also by benefitting from the Consumer Data Right that we have passed in to law and will be implementing with the assistance of the ACCC. But Labor’s instinctive position is higher taxes, higher levies, that’s not always the answer.
QUESTION:
The Australian Banking Association claim they shouldn’t be further penalised because they already agreed to open line banking. Is that good enough?
JOSH FRYDENBERG:
Well, open banking is important and they should welcome it, just as the energy sector will and the telecommunications sector will and others as it’s rolled out across the economy. That is about capitalising on the new technologies that are available to empower consumers and that’s what the Morrison Government is doing.
QUESTION:
The Australian Energy Council has raised concerns about the effectiveness of the Big Stick. What’s your response to those concerns?
JOSH FRYDENBERG:
Well, only the companies that are in breach of the law will have something to fear from the Big Stick, because the Big Stick is all about penalising misconduct. Whether it’s in the retail market, the wholesale market, the contract market, this is ensuring that the energy companies play by the rules and put their customers first. Again, if you look at the United States, if you look at the United Kingdom, they have various pieces of legislation which have divestment powers as part of that. But the Big Stick legislation has a graduated set of penalties, of which divestment is the last resort. There are fines and other penalties, contract orders that can be given, and it’s all about tackling the misconduct in the sector.
QUESTION:
And just on the climate change protests. Why can’t people protest without the threat of their Centrelink payments disappearing?
JOSH FRYDENBERG:
Well, in this country you can protest but you need to obey that law as well. And often too, too often, these protests see people in breach of the law and therefore while people can protest, they should always obey the law.
QUESTION:
We’ve seen another economist, this time from KPMG, say today that the Newstart needs to be raised. They said one hundred bucks a week. This is the latest in a long line of economists and people. Given the way the economy is tracking, isn’t it time to say ‘okay, let’s raise Newstart’.
JOSH FRYDENBERG:
Well, as I’ve said numerous times, Newstart is different to other welfare payments. People who are on Newstart also tend to be on other payments, like the Parenting Payment for example. And two thirds of people who come onto Newstart leave within twelve months as they move into work. Our focus is on improving the job opportunities for those people who are on Newstart, because that’s the best thing that you can do to help. And we’ve been very successful in creating 1.4 million new jobs since we came to Government. The participation rate is now at a record high. The number of Australians in work is now at a record high. And when we came to Government, unemployment was at 5.7 per cent, it’s fallen to 5.3 per cent, and we’ll continue to employ the policies that create more jobs across the community.
QUESTION:
On the issue of Newstart, what would it take for the Government to respond and lift Newstart? As Treasurer, would you be looking for something in particular to justify an increase to Newstart?
JOSH FRYDENBERG:
Like I said, we’re focusing on getting people into work. And one of the reasons why we’ve delivered the first balanced Budget in eleven years is because people have moved from welfare into work. We saw over the ’18-19 Year, 300,000 new jobs being created. 100,000 more than Treasury had forecast. So, our policies, whether it’s the lower taxes that have passed the Parliament now, the most significant tax cuts in two decades, whether it’s the $100 billion infrastructure pipeline, whether it’s the 80,000 new apprenticeships or whether it’s the record spending on schools and hospitals, they’re about delivering people the services they need but also about helping to create jobs across the economy so that people can move from Newstart and into work.
QUESTION:
So, why are, I mean, these economists, John Howard, the Business Council, unions, Labor, why are they all wrong? How come this entire spectrum is wrong on Newstart?
JOSH FRYDENBERG:
Well, the point is, we’re focusing on getting people into employment. We’ve got a disciplined approach across our spending commitments, and we’re ensuring that that is rolled out in a way that benefits the economy and sends more people into work and that’s what we’ve done.
QUESTION:
On the issue of Reza Dehbashi, did the Australian Government release him in exchange for Mark Firkin and Jolie King by Iran?
JOSH FRYDENBERG:
Well, the Attorney-General put out a statement on that. I mean, we look at all these individual cases on their merits. I’m very pleased that the two people who were in detention in Iran have now been released.