ADDRESS TO THE AUSTRALIAN BANKERS ASSOCIATION BREAKFAST
WEDNESDAY, 3 JULY 2019
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I’d like to thank our hosts the Australian Bankers Association, to you Anna Bligh and your staff for organising this event and for your work with your members to produce this new Code.
Labor welcomes the Australian Banking Association’s new code of practice.
It provides practical rights and improvements to customers and that is welcome.
It also symbolically important – as you and your members know – that the industry sends a message to the community that you have listened and that change is happening.
The ABA has stated that it hopes that over the course of this Parliament the banking industry will be less politically contested - I can understand this.
No doubt that for you and your members the Royal Commission was a painful process.
For the country it was a necessary one.
It is now the job of the industry, Parliament and the Government to respond to the evidence, the findings and the recommendations.
As we say in politics – you should never let a crisis go to waste.
The Banking Royal Commission recommended that industry codes be enforceable and actionable by both customers, as well as regulatory agencies.
We call on the Government to ensure that legislation is brought forward to ensure the code is practically enforceable not just for regulators but for customers.
Of course many of the Royal Commissions findings and recommendations were more directed at the regulators and the Government than the industry.
The Government must ensure that these recommendations are given priority in its legislative agenda.
There was a time when a decision by the Reserve Bank to drop interest rates was met with universal applause.
The last two decisions of the Reserve Bank are different.
It is a sign that the economy is in trouble.
It is also a sign that we have reached the limits of monetary policy. Tthe Reserve Bank Governor has made this clear.
Of course for deposit holders an interest rate cut means a cut in the return on their savings.
For your shareholders it means pressure on their returns.
It is why we need to use fiscal policy to boost the economy.
Labor has set out positive proposals through tax cuts and infrastructure investment to make this happen.
Your deposit holders and shareholders have a common interest in backing this plan.
With headline rates at 1% below the rate of inflation – it is in all of our interest to flick the switch to fiscal policy.