SKY NEWS AFTERNOON AGENDA WITH TOM CONNELL
FRIDAY, 4 AUGUST 2023
SUBJECTS: ANZ-Suncorp merger, Competition policy, Cost of living
TOM CONNELL (HOST): Joining me live now is the Assistant Minister for Competition, Charities and Treasury and Employment, Andrew Leigh, thanks for your time.
ASSISTANT MINISTER FOR EMPLOYMENT, COMPETITION, CHARITIES, AND TREASURY ANDREW LEIGH: Pleasure, Tom.
CONNELL: So blocking the move, what did you make of that?
LEIGH: Well, the ACCC has its independent job to do and the government certainly won’t be commenting on the specifics of the decision today. The parties have the option to appeal to the Australian Competition Tribunal or to the Federal Court. All we would do is thank the Australian Competition and Consumer Commission for their work in assessing this proposed merger.
CONNELL: When you look at the banking system in Australia as someone that is partly in charge for competition though, is it fair to say that the big four is big enough?
LEIGH: Well, let me comment on competition across the economy more broadly, Tom; I think that’s more appropriate in this context. I’ve given a series of speeches over the last year about the increase in market concentration, the rise in markups, the fall in employing small businesses and the decline in job switching. We’ve seen over the last couple of decades an economy that has become more concentrated, potentially with adverse impacts on consumers and on workers.
We know that elsewhere countries like the United States are reassessing competition settings to make sure we get that sort of vibrant productivity driving competition that we know has been so crucial to Australians’ living standards in the past. The 1990s productivity surge was off the back of the Hilmer competition reforms. We’re very minded of those reforms as we look to shape up our competition policies to see that we get a more dynamic economy.
CONNELL: Well, given your views though, would it make sense for the big four to get bigger in Australia, given how crucial banking is as a sector.
LEIGH: Again, Tom, I don’t want to go on the specifics of the banking sector. What I will say is right across the economy we see an economy which has become more concentrated. We’re getting more and more large behemoths. It’s important to have those new firms, those new employing small businesses can be important drivers of productivity, but if they’re blocked from growing, if they’re not able to get market share, then that’s a problem.
CONNELL: Do you find it curious that so many people still have home loans, often at higher rates, with the big four? Because we’re talking endlessly about cost of living and, in particular, rate rises. The big four still dominates the market so much where anyone these days can jump on a computer and find endless comparison sites. Is that a sort of curious – I don’t know – behavioral economic study in that?
LEIGH: Switching mortgages is hard, Tom. Anyone who’s given it a go will know the paperwork that’s involved and the fact that there seems to be a lot of sand in the gears. When we banned mortgage exit fees under the former Labor government, that was opposed by the Coalition, but it was the right thing to do because of the increased competition in the market. Today I’d like to see more people walking down the road to get a better deal because that also places more competitive pressure on to the banks themselves.
CONNELL: When you say you’d like to, what can you do about that?
LEIGH: Well, we’re not going to mandate people to switch, but we’re certainly aware of the benefits of switching not only that people bring to themselves but also they help other customers.
CONNELL: What’s the sand in the gears still that maybe might be able to not be there anymore?
LEIGH: There’s a lot of paperwork to do – mortgage discharge forms mysteriously disappearing from websites, not being able to simply with a couple of clicks get out of a mortgage and move to another lender.
CONNELL: So it should be that simple. I know there was an onus pushback on banks where you can sort of say, “Here are all my payments, transfer them for me. I don’t want to contact 68 providers or whatever it might be”.
LEIGH: Stephen Jones has charge of the Consumer Data Right initiative, which is aiming to do just that. But I think the basic principle, Tom, is that it shouldn’t be harder to get out of a mortgage than it was to get into it in the first place.
CONNELL: Where are the discharge forms disappearing from? What websites?
LEIGH: It’s certainly an anecdote that I’ve heard that one of the big four has removed the mortgage discharge form from their website.
CONNELL: So have you checked it yourself?
LEIGH: I have not.
CONNELL: Sounds worth checking in your role, if you’re hearing that one of the big four, you can’t find the form. Wouldn’t you go and check that’s the case?
LEIGH: Yeah, look, it’s certainly one of the issues we’re raising. It’s not the top issue impeding competition in that space. We just need to make sure that people are able to shop around.
CONNELL: There’s talk of recession. There’s the broad talk, there is the technical measure, looking at retail, though, three quarters of shrinking. I mean, this sector is in recession effectively, isn’t it?
LEIGH: We’ve got unemployment now which is at a 50-year low. Job growth in our first year in office has been half a million jobs, better than any incoming government. We do have challenges in the economy. I know households are feeling the squeeze and small businesses too. Our responsibility as a government is to make sure we’re providing that support. So the energy bill relief – opposed by the Liberals – which will provide households and small businesses is important in terms of sustaining the economy. The Housing Australia Future Fund is going to be absolutely critical in increasing housing supply.
CONNELL: Okay, but on this, is this a retail recession?
LEIGH: Look, I don’t use that sort of terminology, Tom. I don’t think it’s a responsible way of talking about conditions. I acknowledge –
CONNELL: How would you describe retail in Australia right now?
LEIGH: People are doing it tough right now. Retailers are feeling the squeeze. That’s certainly a reflection of the increase in interest rates that we’ve seen, which, of course, started under the former government.
CONNELL: Do you worry about a lot of small retail businesses in particular going to the wall in the next few months?
LEIGH: Look, I’m certainly concerned about the health of small business. The energy bill relief has been an important part of what we’ve done there. But also other measures – smaller measures including the electric vehicle discount – again, opposed by the Liberals. It’s striking, Tom, when we roll out these cost-of-living measures such as cheaper child care, cheaper medicines, we just see the Liberals talking them down or voting against them. We’re not getting the sort of support from the Coalition that you’d expect given all their rhetoric of backing families.
CONNELL: Is the challenge for Labor the work between now and the next Budget figuring out which areas are really doing it tough and assist them in the next Budget, with targeted assistance, given inflation? Is that what you see as one of the big roles between now and the next Budget?
LEIGH: Well, targeted assistance is the hallmark of how we look at budget management – it’s how we managed to bring down a Budget this year which reduced inequality more than any other Budget in the previous decade and yet delivered the first surplus in 15 years.
CONNELL: But I mean something like retail, You go, “All right, they’re struggling, what can we do? We don’t want too many people going to the wall when conditions are so bad.”
LEIGH: It’s about making those careful, strategic decisions. And that’s what Jim Chalmers and Katy Gallagher did in the last Budget. That’s what will happen in the next Budget. We’ve got to be strategic as we look to pay down debt, not put upward pressure on inflation but also assist those who are feeling the squeeze.
CONNELL: Andrew Leigh, thank you for your time.