Gillard responds to Treasury warning on exit fees

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By Jill Fraser

At a press conference in Canberra yesterday Prime Minister Julia Gillard addressed a Treasury warning, revealed in documents obtained under the Freedom of Information act, that abolishing exit fees could cost customers more.

PM: The government believes that our moves to increase banking competition, including getting rid of bank exit fees, will get a better deal ultimately for customers, that more competition is good. If the banks go in competing hard for people’s business, then consumers will get better deals and in fact over recent weeks people will have seen major advertising campaigns from the banks out there, offering deals to consumers going in to get consumer business offering better deals as a result.

So that’s what our competition package and banking reforms have been all about, making sure that the customer has choices, the customer can take their business from bank to bank and the customer therefore can require their banks to give them a better deal, that’s why we didn’t want to see exit fees that lock people in into one product and prevent them saying to their bank, I’m going down the road for a better deal.

JOURNALIST: Did you get that advice and did it worry you at all?

PM: You’ve got to strike a package here and government has to make the decisions that it believes are in the national interest and we certainly believe it’s in the national interest to not have people handcuffed to banking products they no longer want and not able to use their ability to say to their bank, I want a better deal or I’m taking my business elsewhere.

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12 COMMENTS

  1. Good on you Joolya / Swan,keep ignoring all the industry experts.

    Looks like this will be about as successful as the pinks insulation program.

    Just how clueless is the rabble?

  2. why is she responding? where is the clown who is posing as our treasurer?
    (not that it matters – neither of them can chew gum and walk at the same time!!)

  3. The industry has no hope when quite simply our Government has no understanding of how it operates.
    Quite simply (as we all know) abolishing exit fees will not increase competition.
    Our dear Julia takes credit for what is happening in the market at present, does she not realise that has nothing to do with the issue, it is simply our major lenders trying to increase their share at the expense of the 2nd tier lenders who now can’t afford to compete becuase the Government itself has put measures in place to decrease competition.
    It is so interesting that the major 4 have never complained about abolishing Exit Fees and were happy to do so….because all they could see was increased business for them.

  4. Talk about trying to get Brownie points. She has no idea, a puppet at best. Don’t they understand, “If you take from one hand, then you will give by the other”.

    Swan, Gillard, put your head back in the sand. Or better still, get some real advice, please send me an email, and I will tell you what should happen.

  5. When the interest rates increase for EVERYBODY and the few who do move around regularly save a few $s, how does this benefit the nation. Most people will stay where they are and cop the higher rates. Once again the vocal MINORITY will be in front at the cost of everyone else. This government is populist and will keep spending our future as long as there are idiots who keep voting for them. I pray they will wake up soon.

  6. Seriously, do any of you think that the moron Abbott would do anything different, or would be a better alternative as PM?

    If he had an IQ above room temparature, he’d be dangerous…..

    I don’t want to hijack the topic, but come on….some of the above comments are just bs.

  7. with all due respect English Bob, it is very very concerning to have a person in the role of treasurer who has not got one clue of business and finance. Wouldn’t you think that he and Julia would at least take some notice of Treasury Dept and stop trying to bs the joe and jane sixpacks of the country?

  8. English Bob, you obviously voted for these incapable managers of our country. But you are right no one in govt understands how the finance indusry works !! Make no mistake though what the govt fail to grasp is that churn between banks lines the banks profits and dooms australians to never paying there home off!!

  9. Hi Barry….yes I did vote for them, because in my opinion the alternative was even worse. I still think that I was correct.

    I have serious misgivings about Swan……but hey, Joe Hockey anyone?

  10. Super profits tax anyone? Because the comments above are right. Legislation like banning exit fees are feeding the chickens. And because the only way to get value from banks (or miners) is to tax them. But only once they start dragging in stratospheric profits of course. I’m not a commie.

    But I’ll bet the same people who are complaining about piecemeal banking amendments above will be the first to condemn a super profits tax too… and I am yet to see anyone else suggest alternative solutions for reining in the banks and increasing competition.

    Anyone interested to see how the mining super profits tax was ACTUALLY supposed to work before the australian public got conned can refer to:

    http://taxreview.treasury.gov.au/content/FinalReport.aspx?doc=html/publications/Papers/Final_Report_Part_2/chapter_c1.htm

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