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Connexus : Issue 39
www.abacus.org.au 19 elsewhere if they’re not happy with the deal they are getting. In fact, in the year to Januar y 2012, we’ve seen over 184,000 mor tgages refinanced, wor th over $47 billion. That’s growth of over 21 per cent in the value of refinancing since before our reforms were announced. you have introduced reforms to the banking sector to make it easier to switch and made significant changes regarding exit fees. Is there anything else needed to better promote competition and choice? The reforms we’ve introduced to help Australian families switch are the backbone of the comprehensive pack age I announced in December 2010. It’s not just our ban on mor tgage exit fees, which is already empower ing Australians to make the switch to another lender if they don’t like the decisions their bank makes. I also announced that the Government will give Australians the freedom to switch deposit accounts with the stroke of a pen, making it much easier to walk down the road and get a better deal on their hard-ear ned savings. We are introducing a new ‘tick and flick’ ser vice from 1 July this year to take the headache out of switching bank accounts, by removing the burden of having to change the details of automatic debit and credit transactions. Instead, customers will be able to easily author ise their new financial institution to do all the heav y lifting for them. The new institution will arrange the transfer of all automatic transactions linked to the customer’s account and infor m associated creditors and debtor s about the new account details. What are some of the major reforms the government will introduce in 2012 that will affect the mutuals sector? I’m pleased to say that the Government has already put in place a very substantial package of reforms. In addition to making it easier to switch, we’ve been supporting smaller lenders like mutuals through our significant investment in the residential mor tgage-backed securities market, our public awareness and education campaign to encourage consumers to shop around, our introduction of a new ‘Gover nment Guaranteed Deposits’ sea l to suppor t sma ller institution deposit funding, and our reforms to make it easier for mutuals to use branding including the term ‘bank’, which several mutuals have already done. What would you like to see the mutual sector do to take competition up to the big banks? I’m a huge supporter of the mutual industry and I’ve said in the past that I think they have the combined competitive power to form a ‘fifth pillar’ in the banking system, which can really put the heat on the big banks and offer a real alternative when it comes to mortgages, deposits and other financial services. In fact, I even went down to my own local credit union a while ago and joined up! I hope mutuals will keep investing in cheaper prices and better ser vice for their members and I’m confident they will do exactly that because I know they always put their customers first. ...it’s fair to say that Australians are listening and they are already out there looking to get a better deal for themselves.