Coalition Senators Dissenting Report
Coalition Senators wish to draw attention to the proposed Government's
'open banking' regime, with the Treasury Laws Amendment (Consumer Data Right)
Bill 2018 introduced into the House of Representatives on 13 February 2019.
Coalition Senators acknowledge that the open banking regime is a core
part of the Government's unwavering commitment to better consumer outcomes in
the financial services sector. Open banking will allow customers to access
their data and direct their data to be sent to trusted and accredited service
providers of their choice. Customers will control who holds their data and how
it is used.
Having better access to their data will enable customers to make better
and more informed choices about the financial products that are right for them.
In turn, informed markets are innovative markets. Open banking will drive
competition within the financial services sector, promoting innovation and
allowing new and better products and services to be developed. Innovation has
already led to better consumer outcomes in the UK, which is the world leader in
The reality of financial hardship in Australia (recommendation 1)
Coalition Senators reject recommendation 1 of the Chair's report, which
recommends "protecting penalty rates" and "reviewing the
adequacy of government payments including Newstart".
Coalition Senators wish to make it clear that, under the system set up
by Australian Labor Party Prime Minister Kevin Rudd in 2009, it is the
independent industrial tribunal, the Fair Work Commission, which sets minimum
pay and conditions, including penalty rates and the minimum wage. Coalition
Senators endorse the system of having an independent tribunal set penalty
rates, a position that until recently enjoyed bi-partisan support. In the lead
up to the 2016 Federal Election, Opposition Leader Bill Shorten said "I'll
accept the independent tribunal". Further, he noted that "the way
minimum wages get set in this country is through evidence, it's through the
submissions of workers, their representatives and employers".
Not long after their election loss, the ALP abandoned this position, and has
since introduced legislation that would undermine the decisions of the Fair
Coalition Senators highlight that the Government has a strategy to boost
the living standards of all Australians through policies that promote economic
growth, boost job creation and support income growth. Australia's targeted tax
transfer system plays an important role in protecting low income Australians
and, as the Productivity Commission has noted, the tax and transfer system has
consistently acted to substantially reduce income inequality. The national
minimum wage, which was increased by 3.5 per cent last year, has been stable at
around 54 per cent of median full-time earnings since 2008, while the number of
Australians under age 65 on welfare is now at its lowest level in thirty
years. Unlike other developed countries, Australia had relatively strong
growth in incomes across all deciles. Australia exhibits a high degree of
income mobility with 90 per cent of Australians moving at least three income
deciles in the last 15 years.
Coalition Senators emphasise that the Newstart Allowance is intended to
be a short term, transitional payment designed to assist people to get back
into the labour market. The Government has continually promoted policies which
improve employment opportunities for those on Newstart Allowance and other
working age income support payments. The Government has committed to continuing
to index these payments each year.
Coalition Senators stress that the best form of welfare is a job.
Credit products targeted at Australians at risk of financial hardship
Coalition Senators note that recommendation 1.7 from the Royal
Commission's final report, which recommends removing point of sale exemptions
from the National Consumer Credit Protection Act 2009 (echoed in
recommendation 6 of the Chair's report) has already been accepted by the
Government, which is now in the process of implementing this recommendation.
Financial services targeted at Australians at risk of financial hardship
Coalition Senators note that the amendment that the Government has
tabled for the Treasury Laws Amendment (Design and Distribution Obligations and
Product Intervention Power) Bill 2018 includes Buy Now Pay Later products.
Centrepay (recommendations 13–14)
Coalition Senators note that over 640,000 welfare recipients use Centrepay
each month to make around two million deductions. This system helps families
and pensioners pay their rent, their electricity and household gas accounts,
pay for education expenses and pay their fines, and for essential household
goods such as fridges and washing machines.
Coalition Senators wish to emphasise that Centrepay is free and
voluntary. It helps individuals to budget, and people can start, change or
cancel their Centrepay deductions at any time. The Government has already moved
to make changes to protect welfare recipients, including by removing unregulated
consumer lease businesses from Centrepay and ensuring that businesses that use
Centrepay to finance families need to apply, comply and act in accordance with
tightened policy and terms.
The need to support and expand financial counselling services (recommendations
Coalition Senators note that, as part of the Royal Commission response,
the Government announced that it would be commencing an immediate review that
will focus on the coordination and funding of financial counselling services.
It will consider gaps and overlaps in current services and the adequacy of
appropriate delivery models for future funding.
Alternative financial products for financially stressed Australians
Coalition Senators note that recommendation 19, which recommends "that
the government consider what tax and other incentives could be used to
encourage mainstream credit providers to offer low interest products to
vulnerable Australians", could result in giving tax cuts to banks.
Coalition Senators wish to draw attention to the fact that, as part of
the Royal Commission response, the Government announced that it would be
commencing an immediate review that will focus on the coordination and funding
of financial counselling services. It will consider gaps and overlaps in
current services and the adequacy of appropriate delivery models for future
Coalition Senators recognize the important work of financial counsellors
and note that the Government is providing $64.2 million over the next four and
a half years for financial counselling services.
Inconsistent approach to consumer protections
Coalition Senators wish to highlight the hypocrisy of the Australian
Labor Party's approach to issues pertaining to consumer protections. The ALP
has doggedly opposed reform measures introduced into the 44th and 45th
Parliaments that are designed to protect consumers.
Coalition Senators wish to highlight the ALP's staunch opposition to the
Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 ('the
Package'). These essential reforms to the superannuation system included in the
Package included the banning of exit fees, the capping of fees for low-balance
accounts, and the elimination of opt-out insurance for low-balance accounts,
inactive accounts, or account for those under 25.
Coalition Senators note the importance of these reforms, and the
widespread support they have received. As noted by Brendan Coates, a Fellow at
the Grattan Institute, Labor's obstinacy could cost young workers at least $400
million per year.
Coalition Senators commend the Government for its determination to
eliminate opt-out insurance for people under-25 or those with balances below
$6,000, in spite of the steadfast opposition from the ALP and the Australian
Greens. These measures are addressed in Treasury Laws Amendment (Putting
Members' Interests First) Bill 2019, which was introduced into the house on 20
In the same vein, Coalition Senators wish to highlight the ALP's
opposition to the Cashless Debit Card, a measure that is designed to protect
vulnerable Australians and those around them.
Welfare quarantining measures have, until late last year, enjoyed
bi-partisan support. The ALP had previously supported the rollout of the Income
Management program and initial trial sites of the Cashless Debit Card. They
also initiated their own expansions of the Income Management program into new
sites, including Bankstown, Rockhampton, Logan, Shepparton, Playford, the APY
lands and the Ngaanyatjarra (NG) Lands. By opposing this policy now, they are
attempting to claw back the
inner-city "green left" vote at the expense of vulnerable people and
communities that have already seen the benefits of this program.
Coalition Senators are disappointed by the prevaricating by the Leader
of the Opposition and the Social Services Shadow Minister who have given mixed
messages about the future of this important policy. They are shamelessly
playing politics with people's lives.
While this inquiry was established in the noble name of consumer
protection, it is clear that those who instigated it have a well-documented
history of opposing much more important reforms that protect many more members
of the Australian community.
Royal Commission into Misconduct in the Banking, Superannuation and
Financial Services Industry
Coalition Senators wish to draw attention to the Australian Labor
Party's lacklustre response to the Royal Commission into Misconduct in the
Banking, Superannuation and Financial Services Industry ('the Royal
The Royal Commission's final report was handed to the Governor-General
Peter Cosgrove by Commissioner Kenneth Hayne on 1 February 2019. The Government
issued a response to all 76 recommendations in the final report on
4 February 2019, the same day that the report was made public.
After taking 15 days to come up with a response to the Royal
Commission's findings, the ALP trotted out 3 measly pieces of legislation that
addressed a mere
5 recommendations in the report. This "response" is an utter
embarrassment, and fails to dignify a Royal Commission that conducted 7 rounds
of public hearings over no fewer than 68 days, called more than 130 witnesses,
reviewed over 10,000 public submissions, and cost an estimated $75 million.
The ALP's proclivity for wasting taxpayer time and money is not merely
limited to the manifestly inadequate response to the Royal Commission. The ALP
has wasted taxpayers' time and significant sums of their money with the conduct
of this inquiry, which has not produced a single substantive finding or
1.29 Coalition Senators note that, by contrast, the current
Coalition Government is adding to its already strong record on financial services
reform. When the Royal Commission handed down its final report, its
recommendations supported multiple pieces of legislation already introduced by
this Government. Legislation that was before the Senate has now been passed as
a result of support from the Royal Commission's recommendations. This is hard
evidence that this Coalition Government was taking the necessary steps to
reform the financial services industry.
Senator Jane Hume
Navigation: Previous Page | Contents | Next Page