Who: “Everything Labor has done has made it easier for the big 4 banks to make bigger profits off the backs of consumers.” Adam Bandt.
The claim: The Labor Government has made it easier for the big four banks to increase profits.
The facts: A formal deposit insurance arrangement was introduced at the time of the global financial crisis when world markets became wary of banks and there was a need to ensure the viability of banking systems all over the world. Deposit insurance was introduced and funded by a levy on banks.
From time to time governments have introduced measures designed to check the monopoly power of the big four banks. Such a package was introduced by the then Treasurer, Wayne Swan, on 12 December 2010. That package included pro-competition measures such as a ban on exit fees on home loans, making it easier to transfer deposits between accounts and banning price signalling by banks. The package also included funding to support the residential mortgage securities market used by mortgage originators so as to offer consumers more choice.
Discussion of evidence: It is debatable whether or not the Competitive and Sustainable Banking System package went far enough or indeed, whether policy that relies on competition will work against excessive bank profits. The immediate impact of the global financial crisis was to reinforce the monopoly power of the big four banks. Customers perceived that the big four banks were more stable than smaller institutions that had trouble raising funds. However, the Swan package did offer increased protection and encouragement for consumers who wanted to change banks.
Mr Bandt’s claim that ‘everything’ Labor did was in favour of the big four banks is excessive.
Tanya Martin Office Manager
Jake Wishart Senior Media Adviser