Labor welcomes the Productivity Commission’s report into competition in the Australian financial system – it contains damning findings and it’s a sad indictment on the statement of competition in the banking sector and how customer loyalty has been exploited to the benefit of the big banks.
 
Problems like those identified in this report are the very reason that Labor fought so hard for a Royal Commission to be established into banking.
 
The Liberals record is clear and it’s not pretty reading for the Australian taxpayer and customer. They attempted to dismantle the Future of Financial Advice reforms and stronger consumer protections, spent 600 days running a protection racket on behalf of the big banks denying the need for a Royal Commission, and now they want to give the banks a $17 billion tax cut.
 
Many financial institutions have been able to get away with ripping off their customers and this Government has done nothing to stop them.  
 
The Liberal Party’s views on a Royal Commission were that:
 
“It is nothing more than a populist whinge from Bill Shorten.”
-       Scott Morrison, Interview with Peter Van Onselen & Paul Kelly, Sky News Australian Agenda (7 August 2016)
 
“We have got to stop the banks and our financial services sector being used as political football…this is essentially a regrettable but necessary action.”
-       Malcolm Turnbull and Scott Morrison announcing the Royal Commission, Doorstop (30 November 2017)
 
The Government could have set up a Royal Commission two and a half years ago when Labor first called for it. If they had, we’d already be implementing its recommendations today. 
 
In another humiliation for Mr Morrison, the Productivity Commission’s report confirms the current negative gearing settings have been used in a way that the taxpayer has underwritten the pass through of the cost of APRA’s macro prudential measures to the banks – at a cost of about $500 million a year.
 
Labor reiterates it support for the four pillars policy, any move to allow the big banks to merge does nothing to help the consumer.
 
We note with interest the set of strong recommendations on mortgage brokers, trailing commissions and transparency – a similar model to Labor’s FOFA reforms that applied to financial planners.
 
Mr Morrison sat on this report for the last month before releasing it today without a formal response. Federal Labor will now take the time to consider its recommendations carefully.