This was our Treasurers pledge ahead of Monday’s Royal Commission Report. Treasurer Frydenburg said that “we’ve got to ensure competition is maintained and strengthened, and that we don’t inadvertently increase the power of the bank, because the competition is very important obviously to economic growth”.
This report has not strengthened competition but increased the bank’s power and obviously, economic growth will be affected. I am calling for a new royal commission with more relevant terms which the current commission avoided.
New terms of reference:
- Why bank profits have skyrocketed since the Rudd Government?
- Why the ACCC has taken no action to investigate a banking monopoly?
- What’s the cause of the biggest credit squeeze in Australian history?
Since 2008, we have seen the biggest transfer of wealth directly from consumer pockets to banks and their offshore shareholders. I feel the royal commission report needs to address these issues rather than a veiled attempt to shift blame to brokers and shift the expense back onto the borrower.
The report recommendations needed to look further into why the Australian Prudential Regulation Authority (APRA) is justified in forcing Principle and Interest loans on appreciating assets and imposing unrealistic serviceability requirements which haven’t been seen since the early 1970’s.
Although I am surprisingly happy with the RBA Governor Philip Lowe, I believe he is the best yet, I am of the firm belief that the RBA should be returned to elected government control. We have seen in the past with previous Governors, that the removal of government control has led to interest rate and financial instability. The aforementioned new terms of reference would be a thrill for long-suffering Australians and put a chill through the banking hierarchy.
If you are looking for a change, remember it starts with you and this report, this is a fantastic opportunity for you to contact your local Federal Member of Parliament. Simply google their email address and send them your thoughts.
I look forward to your comments on the above and the commission report at email@example.com. I’d be happy to share any of your comments next week.