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Connexus : Issue 39
18 Connexus Interview Treasurer outlines his reform agenda Deputy Prime Minister and Treasurer Wayne Swan’s strong support for the mutuals has given the sector a boost. T he Treasurer’s ongoing public suppor t for mutuals and competition in the banking sector is helping to raise the sector’s profile, says Abacus CEO Louise Petschler. “So it was a great opportunity to host a breakfast briefing for the Treasurer at Abacus in March and update him on the issues, challenges and oppor tunities facing our sector. “ The meeting was a welcome and positive conversation for our industr y,” Petschler says. The mutual sector received further public exposure when the Treasurer ‘tweeted’ about the meeting, noting he had met with Abacus and mutual CEOs and the “strong competition” mutuals offer to the big four banks. The meeting was attended by senior Treasur y official Jim Murphy who spent time with Abacus discussing the policy issues relating to FoFA and Basel III. Later, the Treasurer par ticipated in a Q&A with Connexus. Connexus: you have encouraged australians to walk down the road to get a better deal. Why have you done this and are they listening? Wayne Swan: I’ve always believed that building up competition is the best way to get a fairer deal for Australian families and small business. However, competition only works if consumers are free to switch between institutions, and the banking sector has always been full of obstacles to switching which make switching harder. That’s why in December 2010 I announced a comprehensive package of reforms to make it easier for people to switch – so the big banks now face the credible threat that they’ll lose their customers if they don’t treat them fairly. At the core of these reforms was our ban on mortgage exit fees often as high as $7,000, which were locking families into their home loans w ithout their bank having to earn their loyalty. I’m really encouraged that since the ban on exit fees came into force for new home loans on 1 July last year, some 440,000 households have already entered into a new variable rate loan completely free of exit fees. By the end of this year there’ll be around 1.1 million home loans without exit fees – with that number rising to nearly 2 million by the end of next year. So I think it’s fair to say that Australians are listening and they are already out there looking to get a better deal for themselves. are you frustrated by the actions of the major banks on interest rates? I think all lenders have a responsibility to do the right thing by their customer s, and that’s why it’s so impor tant that we have a competitive banking system – so customers can walk down the road and get a better deal if they don’t like the decisions their lender makes. Our banking reforms are about empower ing Australians to do exactly this and it’s great to see we’re getting results. Do you expect a backlash from their customers? Is it heartening to see some of the customer feedback about people switching? It’s great to see our banking reforms are already helping consumers take their business SoME 440,000 houSEhoLDS hAvE ALREADy EnTERED InTo A nEW vARIABLE RATE LoAn CoMPLETELy free of exitfees