Labor will make remittances more transparent, cheaper and fairer - Transcript, Doorstop

ANDREW LEIGH MP

SHADOW ASSISTANT TREASURER

SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY

SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS

SHADOW MINISTER FOR TRADE IN SERVICES

MEMBER FOR FENNER

JENNIFER YANG

LABOR CANDIDATE FOR CHISHOLM

E&OE TRANSCRIPT

DOORSTOP

MELBOURNE

THURSDAY, 13 DECEMBER 2018

SUBJECTS: Labor's plans to make remittances simpler and fairer; Labor’s plans to fund hospitals and schools and deliver bigger budget surpluses over the four years and over the medium term.

JENNIFER YANG, LABOR CANDIDATE FOR CHISHOLM: Good afternoon, everyone. Thank you so much for coming to one of our media conferences today. I just want to quickly introduce Andrew Leigh – Dr Andrew Leigh is our Shadow Assistant Treasurer and today we're just going to talk about one of the policies Labor is adopting in terms of remittances overseas, sending money overseas. Now I’ll pass over to Andrew to talk to you more about this policy.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Terrific. Thanks very much, Jennifer, and thanks to all of you for being here today. As you know, Jennifer is Labor’s terrific candidate for Chisholm and she is somebody with whom I've been working extensively as Tony Burke and I have developed this policy to make remittances more transparent, cheaper and fairer.

We know that every year Australians send billions of dollars overseas to family and friends. This might be taxi drivers working an extra shift to help out somebody who's fallen on hard times back home. It could be someone who's working a bit extra in a pharmacy in order to help put a nephew through school. Remittances are larger in size than overseas aid. At a time when Australia's overseas aid budget has been cut by the Coalition, remittances are more important than ever.

But right now the pricing of remittances is bamboozling. It's too confusing and it means you get an incredible spread of prices. Australians pay more for remittances than do people in the United States or in Korea. Just to give you some sense of the size of what the fees look like, an Australian who wants to send $1000 overseas will pay according to the World Bank $77 in exchange rate mark ups and flat fees. One of the problems in this market is competition isn't working to drive down prices for consumers. That's because the pricing comes in two parts. There's a flat fee for the transfer, but there's also an exchange rate spread. We've seen too many providers saying that they're charging a small fee, when what they mean is the flat fee is small but the exchange rate spread is big. I've seen this behaviour even by some of our biggest banks that are now facing a royal commission.

So what we've announced, the policy that's Australia will get if Jennifer is elected and we're able to form a Shorten Labor Government after the next election, is a policy of full fee transparency. If you're in the market transferring money overseas, you have to tell your customers the total charges they will pay for remittances. It’s a policy that's been welcomed by FECCA and welcomed by CHOICE. It's been welcomed by Transferwise, one of the providers in the market that has shown its customers the full fees they'll pay. And as part of Labor's commitments to work with multicultural communities, this policy emerged from a series of roundtables in Sydney, Brisbane and here in Melbourne. It's a policy that was developed in consultation with candidates like Jennifer, with experts in the remittance sector and people in multicultural communities who didn't want so much of their hard earned wages to be eaten up by fees and charges just to pay the financial middlemen.

At a time when we've got a royal commission taking place, a royal commission which the Coalition voted against 26 times, I'd call on the Coalition to pick up Labor's plan to make remittance transparency fairer. And if they don't pick it up, if they don't fix the remittance market, then Labor will, to get a fair deal for multicultural communities and a fairer deal for those in the developing world who are being assisted by remittances.

We're very happy to take questions.

REPORTER: [inaudible] remittances to India?

LEIGH: I can certainly get you the exact number for bilateral flows to India. Last time I looked at it, it was one of the most significant countries for Australians to send remittances.

REPORTER: [inaudible] compare the exchange rate to?

LEIGH: You're absolutely right and this goes to the way in which the remittance market works at the moment. We have a benchmark exchange rate fee - that's what you say if you go to Yahoo Finance or the Google Finance. And that benchmark fee is what we would ask all remittance providers to compare their offerings to. So if you want to tell your customers that you’re charging a zero flat fee but you're going to have a 15 per cent mark-up on the exchange rate, then you'll have to be honest about that about that. Right now, firms are saying ‘we charge no fee’ but then they're charging these fat mark ups over the benchmark exchange rate, and giving customers a worse deal.

REPORTER: [inaudible] government fix the exchange rate?

LEIGH: Well, as you know, Australia floated its exchange rates in the early 1980s and so the exchange rate is set by the market. We certainly wouldn't be proposing to go back to fixing the exchange rate. What we think is that if you're doing remittances, you should be able to see the real cost compared to the exchange rate - what's the remittance provider getting through its fees and what's it getting through giving you an exchange rate that's a little bit worse than the benchmark. 

REPORTER: [inaudible] Labor budget look like?

LEIGH: So there is going to be an awful lot different in terms of budgets if we're successful in winning an election, but a high level there are three big things. First, we would make sure that Australians got bigger personal income tax cuts then the Coalition will offer. Their personal income tax cuts are targeted to multinationals and millionaires, ours will be targeted at average workers. Second, we’ll invest more in our schools and hospitals as we know Australians want every school to be a great school. They don't want us to have the biggest tax loopholes in the world – they want us to have the best schools in the world. And third, we’ll deliver bigger budget surpluses over the four years and over the medium term. We can do that because of the hard economic work done by Bill Shorten, Chris Bowen, Jim Chalmers and the rest of the economic team. Thanks very much everyone.

ENDS

Authorised by Noah Carroll, ALP, Canberra.

 


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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | Andrew.Leigh.MP@aph.gov.au | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.