Page 4715 - Week 15 - Wednesday, 7 December 1994
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and Minister responsible for consumer affairs, Terry Connolly, has expressed concerns at inadequacies in the bankers code and is seeking improvement, particularly in the areas of privacy and confidentiality. Mr Connolly is pursuing this matter directly with the ABA and is taking the national lead on this issue. Mr Connolly has been outspoken in his criticism of the way in which banks have quietly gone about introducing charges on accounts, after having advertised no fees, only government charges on accounts. That is a very misleading claim by some banks. The Federal Consumer Affairs Minister, Jeannette McHugh, also attacked the Commonwealth Bank when it announced the new schedule of fees last month. In recent times, banks have increased their interest rates in respect of loans but have failed to increase deposit rates as quickly or as substantially. Banks are charging consumers a wide range of fees and charges that have the most serious impact on those who can least afford it, that is, the little people. Pensioners and young children with small amounts of money find that their savings are eaten away by the various charges and fees.
Having said this, I am concerned also at current trends to increase charges on bank accounts. There has been a substantial increase in the reported profits in the banking sector just recently. For example, the National Australia Bank reported a record profit of $1.71 billion for the most recent year of operation, and Westpac also reported a substantial increase in its profit. I would suggest very strongly that individuals shop around to find the best deal available or which bank charges them the least. The Consumer Affairs Bureau actually publishes a brochure that compares fees and charges of various institutions.
People should also remember that there are alternatives to banks, namely, building societies and credit unions, which people could also consider. These institutions are member orientated and are supervised under a national scheme, with prudential standards set by the Australian Financial Institutions Commission, and those standards are equal to or tougher than those set for banks by the RBA. Madam Speaker, the banking industry traditionally prides itself on being synonymous with words such as "safety" and "integrity". Consumers have felt that they could trust the banks and their representatives. We are seeing now more and more people disillusioned with that industry.
Mr Stevenson has drawn attention to a number of cases which are clearly of concern. I believe that it is time that the banking industry reviewed its direction and focused on customer service rather than on, as it appears, only their own enormous profits, which are increasing substantially, as I have just stated. I take Mr Stevenson's point. He has been a consistent campaigner on this issue. I am not able to comment on the individual cases that he mentioned, although I will certainly study the material that he put before us today. If there is further action that the Government should be taking, or could take, then we will clearly be progressing those matters.
MADAM SPEAKER: The discussion has concluded.
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