TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Doorstop
Melbourne
Friday, 21 June 2002
12.10 pm

 

SUBJECTS: Bank fees; Senate obstructionism; stem cell research; St George

Bank

JOURNALIST:

Treasurer the Reserve Bank has indicated, has released figures which indicate

that Australians are paying record bank fees. What’s your reaction to that?

TREASURER:

I think it is important that the Reserve monitor these things. I think it is

very important that Australian banking consumers know the fees that are being

charged in the interests of transparency and I would say to consumers that the

way in which to minimise fees is to look for those products which are no-fee

products. A number of the banks have already started offering those and the

banks as a whole are working towards getting an industry-wide product which

is a no-fee product. But shop around. Don’t take the banks’ word for it. Banks

are there to make profits, they will charge you fees, if you want the best service,

shop around and get the lowest fee paying account.

JOURNALIST:

Are they charging too high fees?

TREASURER:

Well, I think that there are some products that people use that do have fees

too high. There are ordinary transaction accounts which have high fees and for

people who don’t have many, they should go to an account that has transactions,

a minimum monthly transaction for no fees. And I think that there are some accounts

which are too high and people have got to exercise consumer choice and competition

to try and get better products and to force the banks to offer those better

products.

JOURNALIST:

What about Government regulation?

TREASURER:

Well, the Government ensures that there is complete transparency in relation

to this. The Government of course, is in the business of cutting fees on bank

accounts. This is the Government which abolished the Financial Institutions

Duty which was a tax on people who were putting money in to bank accounts, $1.2

billion of fees abolished, and we have a program now to abolish the Bank Account

Debits tax, a tax for taking money out. But the amount that the banks themselves

charge are private sector fees that they are charging for services. I think,

for some of those services, there are very high fees and I would say to people,

shop around because there are better deals going. And if consumers take their

business elsewhere, believe me, the banks get the message. Now one of the examples

of this is that there was a bank recently which decided to change its policy

in relation to frequent flyer points retrospectively. And when consumer reaction

to that was known, it was forced very rapidly to change its position. Consumer

power, choice, competition, these are the things which are going to drive bank

fees down.

JOURNALIST:

Treasurer, the consumers association suggest that the Government has the power

to direct an ACCC investigation or alternatively to sit down and work out some

way of capping the cost of bank fees and not charging at least any more than

they actually cost. Is the Government interested in going down that path?

TREASURER:

Well the Australian Competition and Consumer Commission has full power now

to investigate any complaint against any bank. It doesn’t need anything in addition.

It is there, right there at the moment. It has the full power to do it. And

if anybody has an example of where there is deceptive conduct or misuse of market

power or any of those sorts of things, they can take that to the Australian

Competition and Consumer Commission. Indeed, if in relation to their own bank

accounts, if they have a complaint, they can come to the Ombudsman. That is

part of what we are down here for today, to enhance consumer rights.

JOURNALIST:

Mr Costello what do you think is the likelihood of a double dissolution on

border protection?

TREASURER:

Look, the Australian Constitution provides that if a measure is twice rejected

by the Senate there is the option of going back to the people. Now, no measure

has been twice rejected yet. But if that were the case, then the Constitution

would be fulfilled. That doesn’t mean that the Government would necessarily

exercise its right but the Senate has to take that into account. The Senate

has to take into account that it is not the popularly elected house of the Australian

Parliament, the Labor Party did not win the election, the Democrats did not

win the election. They have a capacity to frustrate a Government’s will but

under the Constitution, if they do that twice then there is a mechanism for

resolving that. Whether the Government would do it would only be considered

when those circumstances arise and they haven’t arisen.

JOURNALIST:

How would an early election affect your leadership ambitions?

TREASURER:

Well, as I have just said, there is no prospect of an early election at this

stage because there is no Bill that has been twice rejected, and even if there

were a Bill that had been twice rejected, that doesn’t mean that the Government

would necessarily go to the people. So it is far too premature to talk about

double dissolutions or early elections. What we have is a number of Bills which

have now been rejected once. The pharmaceutical benefits changes, to put the

Pharmaceutical Benefits Scheme on a financially sustainable basis, have been

rejected. I call on the Senate to reconsider its position. The Labor Party did

not win the election. The Australian Democrats did not win the election. Governments

which are elected in the House of Representatives are generally allowed to introduce

their Budgets. They have rejected those Budget measures once. I call on them

to think again and think again in the interests of running a proper Pharmaceutical

Benefits Scheme.

JOURNALIST:

Mr Costello, just in relation to the stem cell legislation, there’s reports

today of research today that adult stem cells may be just as effective as embryonic

stem cells in fighting disease such as Alzheimer’s. Would that sort of research

change your, or that sort of information be likely to change your vote in relation

to this legislation?

TREASURER:

Well look, I haven’t read the research, I don’t know the details of it, but

obviously the way in which I approach this issue will be on the basis of the

best information so I will certainly be looking at all of the information that’s

available. I can’t tell you, because I haven’t seen it, or the detail of it,

whether it would change my mind. But I will certainly be looking at it. Anything

else that happens as well.

JOURNALIST:

Mr Costello, come June 30, St George’s articles of association lapse, meaning

that one individual shareholder can own more than 10 per cent and a takeover

bid can happen. Can you give us your thoughts on, does the Government wish to

see a regional like St George remain (inaudible) New South Wales?

TREASURER:

Look, if another bank were to make an offer for an existing bank, it would

need to pass the competition test which is administered by the Australian Competition

and Consumer Commission. It would also require the Treasurer’s approval on the

grounds of public interest. Now if an offer were to be made, it would be considered

on its merits then. I am not going to pre-judge it because that would be improper.

I am not going to speculate on whether it is going to happen because it hasn’t

happened. But if it were to happen they would be the two matters that would

be considered.

Thanks very much.