TONY BURKE, SHADOW MINISTER FOR CITIZENSHIP AND MULTICULTURAL AUSTRALIA
ANDREW LEIGH, SHADOW ASSISTANT TREASURER
LABOR LEADS THE WAY ON REMITTANCES
Labor welcomes research released this week showing that unclear remittance structures are costing Australians $3.1 billion a year.
We have begun holding a series of community forums across Australia on this important issue. Already, we‘re hearing from the multicultural community that the current system just isn‘t working for them.
Labor wants to ensure that Australians who send money overseas get a competitive deal. But the number of remittance providers is shrinking and pricing can be confusing.
In our community, there are plenty of people working long hours to send money back to relatives in Manila, Moresby or Mumbai. According to the World Bank, remittances to developing countries are worth half a trillion dollars annually – twice the value of foreign aid.
But according to a previous study, a person who tries to send $1000 from Australia to a developing country will see $77 eaten up by transaction fees and exchange rate spreads. A full-time worker who wanted to send half her salary home would be toiling away for more than a week every year just to pay financial middlemen.
Labor wants to see a safe and secure way for people to send money overseas. Simpler fee structures will result in a fairer system and put downward pressure on the cost of transferring money overseas.
Labor is exploring whether institutions should be required to offer full fee disclosure, stating a single fee per transaction, denominated in Australian dollars. This would include both the flat fee and the exchange rate spread (relative to a standard benchmark). It would be similar to the comparison rates we already enjoy when shopping for car loans, mortgages and credit cards.
Of course international money transfers need to be carefully monitored, but that's no excuse for excessive and confusing fees. With $3.1 billion being lost each year, it‘s time to make remittances fairer, cheaper and simpler.
THURSDAY, 24 AUGUST 2017