That’s all great Wayne, but what about interest rates?
Treasurer Wayne Swan, as Acting Prime Minister, began his press conference today by acknowledging Australians who have been hit by savage, widespread flooding.
Then he started talking about how he was going to help ordinary Australians by shaking up bits of the financial system, and it was at that precise point that Wayne Swan lost about 99 per cent of banking customers.
Floods they could understand, even if they were high and dry; covered bonds and RMBS funding were outside their usual ATM transactions.
There was little the Treasurer said which gave any substantial confidence to customers of your average high street bank branches that they now could boss around their loan manager and benefit from lower loan charges.
Nor was there a guarantee that interest rates would not again shoot up beyond the official rate.
Existing mortgage holders? You are skewered. Same goes for those already with bank accounts. There will be no fee-free exits guaranteed by law for them.
The Government says it will pass legislation banning exit fees on new loans and accounts by July 1 next year and that banks, who have already dropped the penalty charges, will be monitored in case they instead sneak them into up-front fees. But that sneakiness wont be illegal, as such, just frowned on.
And look, there will be a national awareness campaign “to empower consumes in banking”. In short, another advertising campaign.
Meanwhile, credit unions and building societies which act very much like banks will be able to call themselves banks. However, there was nothing directly promoting mortgage lenders who don’t also take deposits—the Aussie Home Loans and the like—but have a record as vibrant competitors to the big banks.
And then the ACCC, created to stomp on uncompetitive practices, will be asked to look at the banks in case there are uncompetitive practices to be stomped on.
And let us not forget that borrowers will get a sheet of paper showing them what their loan would cost. The “fact sheet” will also show what other lenders might charge.
“This is about values,” said Swan, who then related a cameo of a family yearning for the security of a home but who were at the mercy of hikes in interest charges.
It was a 45 minute press conference—a triple-header with Assistant Treasure Bill Shorten and parliamentary secretary David Bradbury also lining up—and came complete with slide show.
Behind it all was the Labor government pledge that it would peg interest rates—most importantly on mortgages and loans to small business—to as low a level as possible.
And nobody who watched that trio perform could be certain their reforms would deliver on that pledge.
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