Swan announces Competitive and Sustainable Banking System Package

As promised, Deputy PM and Treasurer, Wayne Swan, has released the Government’s Competitive and Sustainable Banking System Package (see also Press Release, providing a dot-point summary of the proposals).

Most significantly for competition lawyers, it contains a proposal for price signalling laws.  The government has released an Exposure Draft ‘Competition and Consumer Amendment Bill (No 1) 2011‘ containing its price signalling proposal – submissions are due by 14 January 2011.

A summary of the Exposure Draft legislation and related information is available on my web site (it’s worth a look, if only for a laugh at the addition of some more bizarre numbering into the act – eg, ss 44ZZZ and 44ZZZA).  I will post separately some commentary on the content of the bill shortly.

In addition, the package will (as expected) ban exit fees outright on new home loans from 1 July 2011.  A raft of other measures are also proposed.

More to follow …

Swan announces that he will announce bank competition reforms tomorrow

Deputy Prime Minister and Treasurer Wayne Swan called a press conference today to announce that he would be announcing the Government’s banking competition reform plan tomorrow.

The press conference was light on detail, with Swan refusing to answer any questions about the detail of the reforms, prompting one journalist to ask “Why call a press conference when you are actually not telling us anything new?”  There was not a satisfactory response.  The key messages from Swan were:

• The Government’s banking competition reform plan will  be announced tomorrow and follows consultation with regulators.
• Some may not be happy with the announcement (in particular, ‘the big four won’t be happy‘), but it will be ‘balanced’
• The plan will include a range of reforms – short, medium and long term
• Over time the plan will ‘build on important reforms to make the banking system fairer and more competitive’ (the Treasurer evaded a journalist’s question about how much ‘time’ would pass before consumers see a ‘real difference’)
• The package will empower ‘consumers to shop around and get a better deal’ (a few references to ‘smaller lenders’ and and the need to build on recent consumer reforms to further assist those lenders)

Nothing groundbreaking there, although some Australians may be surprised to learn that NOTHING is ‘more important to Australians than having a fairer and a more competitive banking system’; I suspect it may not be difficult for most people to identify some issues of higher personal priority, but that’s a separate issue …

This, of course, comes while there is an existing inquiry into banking competition (not instigated by the Government, but rather by Senators Xenophon (Independent), Bushby (Liberal) and Williams (Nationals) and due to report on 31 March 2011)  … despite the numerous submissions made to that inquiry (currently 102), it seems unlikely that it will lead to any policy or legislative change, given the Government seems to have settled on its approach to banking reform.

I’ll post more details tomorrow when some substance emerges.

View transcript.