Federal Budget 2017: Focus on banking sector, cost of living pressures

AUSTRALIA’S big four banks will be targeted in tomorrow’s budget, as Scott Morrison finds ways to make it easier for customers to shop around.

Australia’s big four banks will be targeted in tomorrow’s budget. Picture: Kym Smith

AUSTRALIA’S big four banks will be targeted in tomorrow’s budget where the Treasurer will announce new measures to make the financial sector more competitive.

The changes will include a Productivity Commission review, with customers to reportedly have access to their banking data to better shop around.

Treasurer Scott Morrison said a competitive financial system was “central” to the government’s plans for economic growth and delivering better outcomes for consumers and small businesses.

“The Government is committed to ensuring that Australia’s financial system is competitive and innovative,” he said in a statement today.

The Productivity Commission would review “the level of contestability and concentration” in key parts of the financial system, he said.

It would also examine competition in the provision of personal deposit accounts and mortgages and services and finance to small and medium businesses.

“It is important ... that we understand what are the barriers and what are the things preventing customers getting a better deal,” Mr Morrison told Fairfax Media.

There was no doubt the major banks had become more powerful since the Global Financial Crisis, Mr Morrison told the publication.

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Treasurer Scott Morrison will target the big four banks. Picture: Ray Strange.

Customers and regulators would get a chance to have their say in the Productivity Commission inquiry, which would look at banks having both retail and wealth arms among other issues.

The inquiry will report to the government by mid-2018, putting the issue squarely on the agenda for the next federal election.

It’s understood the inquiry will contain similar terms of reference to what Labor and the Greens are calling for in a Royal Commission.

“It’s important that we deal with these things now,” Mr Morrison told Fairfax Media.

“The alternative proposals are to have inquiries which take years and years and years.

“We believe in getting on with these things now, there is now need to drag that process out.”

Shadow Minister for Financial Services Katy Gallagher said Labor would examine the details of the Productivity Commission inquiry but the party would continue to call for a Royal Commission.

“We know that it is the only way to deliver the systemic, structural and cultural change needed to ensure Australia’s financial system remains strong and with consumers best interests at the centre,” she told News Corp.

Malcolm Turnbull said tomorrow’s federal budget would be about “a fair go” for Australians.

“We are the nation of a fair go, it is in our DNA and our budget will reflect that,” the Prime Minister told reporters in Canberra today.

Prime Minister Malcolm Turnbull says the budget will provide a fair go for Australians. Picture Kym Smith.

Speaking at the Australian Federal Police headquarters where he announced a multi-million dollar funding boost for Australia’s spy agencies and national police force, Mr Turnbull said the budget would provide both national and economic security.

“This budget will be committed to fairness, opportunity and security, ensuring that Australians are given the opportunity to get ahead,” he said.

It would give Australians the economic growth that enabled them to get better jobs, better-paying jobs, start or grow a business and “realise their dreams”, he said.

He did not comment on reports the government would be launching a banking inquiry.

Crossbench senator Nick Xenophon said the productivity commission’s powers were not extensive enough for a comprehensive inquiry into the financial sector.

Senator Xenophon backed a Royal Commission or Commission of Inquiry instead.

“I think that it will be something comprehensive, it will be forensic and it will be able to deal with issues in a way the Productivity Commission simply doesn’t have the powers to deal with in terms of calling witnesses,” he told ABC.

Originally published as Federal Budget 2017: Focus on banking sector, cost of living pressures