A six month long Senate inquiry into competition within the Australian banking sector has concluded with the release of the Committee’s final report and recommendations, including minority reports from the Government and Independent South Australian Senator Nick Xenophon.
The views of Australian finance workers were provided to the Inquiry via written submission and in person by FSU National Secretary Leon Carter who was called to provide evidence to the Inquiry.
The report contains 38 recommendations, 14 of which are already being progressed by the Federal Government.
Most media articles on the Committee’s final report have concentrated on a recommendation that the Government reverse the exit fee ban that enables customers to move their mortgage from one lender to another without being penalised by exorbitant exit fees. The Government have already signalled that they do not intend to reverse the ban, arguing that the ban is imperative to improve competition in banking.
The Committee’s report, while stopping short of a direct recommendation, states that “The Committee therefore strongly supports the retention of the ‘four pillars’ policy preventing merger between the four major banks. It also urges the ACCC to take a strongly sceptical view towards any proposal for one of the four major banks to take over one of the remaining regional banks”. Senator Xenophon calls for an amendment to the Act to ban further mergers between banks.
The FSU supports the retention of the four pillars policy, however the policy didn’t stop the merger of Westpac and St George, and we don’t want to see any other second tier bank or any of the regional banks swallowed up by one of the big four – allowing further mergers is the antithesis of competition. You can’t have increased competition if you reduce the number of players on the field. The inquiry, in its recommendation, acknowledges that mergers haven’t been good for competition but doesn’t make any direct recommendation of legislative change that would make them more onerous.
The first recommendation of the inquiry recommends another, broader inquiry into all aspects of banking. While FSU wouldn’t support another inquiry just for the sake of having an inquiry, the union did present to the inquiry the view that focusing on competition alone made the scope of the inquiry too narrow, and didn’t provide the opportunity to examine all of the ways we can achieve better banking in Australia, for bank workers and bank customers.
FSU will continue to lobby politicians about the need for holistic change to the banking industry that directly addresses the issues that consumers and bank workers want to see fixed through sound, yet tough, regulation. Better Banking campaign supporters can do the same by demanding action from their local politicians.
Finance Sector Union of Australia
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