SUBJECTS: New Banking Inquiry; drought; dams.
SAMANTHA ARMYTAGE, HOST: Treasurer Josh Frydenberg has given the green light to a new banking inquiry. The Competition and Consumer Commission will look at why recent interest rate cuts haven't been passed on in-full to mortgage holders.
(AUDIO OF JOSH FRYDENBERG SPEAKING)
We have a $2 trillion residential mortgage market and the big four have locked up around 80 per cent of that market and Australians are sick and tired of the Reserve Bank cutting rates, the politicians calling on the banks to pass on those rate cuts, and then the bank's ignoring both the Government and the Reserve Bank.
ARMYTAGE: The inquiry will look at pricing across the mortgage market, how banks decide whether or not to pass rate cuts on to customers, and competition across the banking sector.
DAVID KOCH, HOST: For their take this morning we're joined by Nationals MP, Barnaby Joyce and Shadow Minister for Agriculture, Joel Fitzgibbon. Good morning to you both. Barnaby, home loans, heavy financial burden on so many Aussie families; will this inquiry put pressure on the banks to pass on those four rate cuts?
BARNABY JOYCE, MEMBER FOR NEW ENGLAND: Well, $2 trillion home loan market and 80 per cent held by the four major banks certainly means that we have a responsibility to see those rate cuts pass through in a more formidable way. Now, what I can say to the major banks is that you got the ACCC inquiry coming, you'll have recommendations from that inquiry coming forth. You'll have the Parliament considering those recommendations and putting forward changes if they're required. I might also ask them to recollect what happened to the power companies when they decided they didn't want to listen to us. Now, we have divestiture power coming forward for them – I’m not suggesting that's what happens to the banks, but I would suggest, if you don't listen to the Treasurer, if you don't listen to the elected government of the Commonwealth of Australia, then don't be surprised when it's a pecuniary – whether there's a more overarching form of reviewed legislation regulation that comes upon you. Do the right thing. You're acting like there's not a market – which really concerns us – if you act like there's not a market and you control things without real market pressures then we’ll have to do something that replicates a market pressure.
ARMYTAGE: Joel, we’ve just had a $70 million banking Royal Commission, couldn't they have looked at some of these things in that? How many of these things do we have to have into the banks? And I think people out there with mortgages just want this sorted out.
JOEL FITZGIBBON, MEMBER FOR HUNTER: The Royal Commission was really important, but it looked at different facets of the banking sector. We welcome this. The ACCC asked for the opportunity to hold this inquiry. The Government spent about two weeks trying to run interference and refusing to hold the inquiry. Barnaby last week on this program argued against the inquiry, and I note now he's welcoming it. Look, there's a real problem here, rate cuts aren’t being passed on to consumers, to those who hold mortgages, and it's going to be a good thing and we expect some very meaningful recommendations to flow.
KOCH: Yeah, we’ll keep an eye on it. Let's move on and drought ravaged communities will also benefit from a billion dollar funding boost for water infrastructure in New South Wales. Barnaby, you've called for this for years. How quickly will we see bulldozers on the ground?
JOYCE: As quickly as we possibly can and by next year we will start. This is so good; we've got Dungowan Dam, and for the city of Tamworth Mole River Dam has started the business plan in the north of the state - Wyangala Dam. On top of the dams were building in Tasmania, on top of the water infrastructure projects that are part of the Murry Darling Basin Scheme, on top of what Queensland should be getting into Rockwood Weir, but you know they’re dilly dallying – you know they're looking out for the green faction, the Mark Butler Booroolong Frog faction – I know Joel knows about that. We've got to get these dams started and to hear Gladys Berejiklian, Melinda Pavey, Stokes, John Barilaro, Michael McCormack all saying we're going to streamline the regulation process. We're going to make sure the legislation gets out of the way. We're going to shift the bureaucrats who don't want to build this. We're going to get in and make this happen; means that we are doers and that's what the people out in drought areas want to see. They want to see dams, I've been fighting for dams, everybody's on the same page – I don’t know about the Booroolong Frog faction of Mark Butler, maybe Joel would like to tell us what their position will be on this. But you know this is a great step forward. I'm absolutely proud of that. We've made this step.
ARMYTAGE: It is amazing what governments and councils can do when the whole country sort of starts screaming for things, you know, after the horse has bolted. Joel, will dams go far enough? Do you think should there be more done to turn water inland a little bit?
FITZGIBBON: Well, I think I'll be forgiven for being both cynical and sceptical about this announcement. Barnaby Joyce has been telling us for the last six years he was going to build dams, in fact, prior to the 2013 election, he announced we’ will – they’re going to build a 100 dams. And now six years on, we've waited, we waited but now they say they're going to build a couple of dams. We will wait and see. The fact remains that the last government in this country to build dams was a Federal Labor Government, and Barnaby we wish you the best – get on with it. We hope you are successful but you haven't had a lot of success up until now.
JOYCE: Well, we extended Chaffey Dam and what we really need to know …
FITZGIBBON: No you didn’t ...
JOYCE: From the Labor Party, Joel, will you support this? Or will you side it up with the you know, the screeching Scandinavians and tell us that there's a frog you've got to save – there's a leech that’s sacred – are you going to actually stand up and say we support you constructing these dams?
FITZGIBBON: You’ve got stop telling fibs about Chaffey Dam …
KOCH: Ok, alright. Are you supporting it Joel, yes or no?
FITZGIBBON: Can I say that dams are important, and these are largely – yes.
FITZGIBBON: These are largely about providing water to urban communities – really, really important. But let's get on talking about a National Drought policy, the Government's waiting for the NFF to write its policy for it. Can we just have a National Drought policy?
KOCH: All right. Thank you for that.