21 October 2015
Transcript - #2015060, 2015

In the role of: Minister for Small Business and Assistant Treasurer [21 September 2015 - 18 July 2016]

Interview with Kieran Gilbert, Sky News, AM Agenda

SUBJECTS: Government’s response to the Financial System Inquiry.

KIERAN GILBERT:

With me now a new member of the Turnbull Cabinet Kelly O'Dwyer. Thanks for your time and congratulations. We haven't spoken to you since your promotion.

MINISTER O'DWYER:

Thank you. Great to be with you.

GILBERT:

Joe Hockey, how will his career be remembered in your view?

MINISTER O'DWYER:

I think he has had a stellar career in the nation's Parliament. Not many people get to have a 20 year career in this place and he has. He has made an enormous contribution over that period of time. He has served in a variety of capacities, not only as Treasurer but let's not forget he was Human Services Minister, a massive portfolio. He made a number of changes there to streamline the system to make it easier for people to be able to get their payments. He also did incredible things as Small Business Minister as well, making it easier again for small business to grow and to prosper. I think he can walk out of this place with his head held high. I certainly enjoyed my time working with him directly as his Parliamentary Secretary. He was a fabulous boss, he was someone who was always able to be contacted at the end of the phone on any queries. I can't speak highly enough of Joe Hockey.

GILBERT:

Do you think he's had a bit of a raw deal, copped a lot of flak over the 2014 budget. What a lot of people don't remember is that Tony Abbott chaired that Expenditure Review Committee process so I know it's history now but do you think he copped too much of the flak given the failure of that budget.

MINISTER O'DWYER:

You've said it Kieran, it's history. We're looking forward. We've got some challenges ahead but also many opportunities and that's what the Government's going to be focused on, the many opportunities that are open now to all Australians. That's what our budget will be doing. It will be focused on the increasing prosperity of Australians, growing business and creating jobs. Creating the right policy settings to do just that.

GILBERT:

The bank industry, if we turn to some of those policies is saying that someone's got to pay for their increased capital requirements under the announcement made yesterday in the wake of the Murray Review. Do you expect that the big banks will follow suit, follow the lead of Westpac, now given that confirmation of these new requirements under APRA?

MINISTER O'DWYER:

Well these new requirements are no big surprise really to the banks. I mean APRA has been working with the banks over a period of time to make sure that they meet capital adequacy requirements to bring us into line internationally. We need to have banks that are unquestionably strong. A number of banks have been raising money. They have been doing that over the past little while and they've not been raising their mortgage rates, their interest rates there, so I don't think that we can draw from the Westpac experience something that will apply right across the banks and I think it's up to Westpac to be able to justify their decision, it's not for us.

GILBERT:

In fact some of the institutions like Macquarie have reduced their mortgage rate even though they are subject to the same capital requirements.

MINISTER O'DWYER:

Indeed that's right. A number of smaller banks have done that so as I said, I think Westpac will have to face up to their customers and justify their decision, that's something that they have to do that's not something that the Government needs to do.

GILBERT:

They're not the only ones. The ANZ outgoing chief Mike Smith says if you expect banks to be able to raise capital the cost has to be borne by somebody. Do you accept that as a proposition?

MINISTER O'DWYER:

It's important that we have strong banks. It's important so that when we face a crisis, an international crisis, a global financial crisis, that our banks are strong and that they are unquestionably strong. That's what David Murray said, that's what we are delivering in our response to the Financial System Inquiry. We believe that that is important for all Australians to have confidence in our banking system which has served us very well and will continue to serve us well. It is our responsibility to make sure that does going forward.

GILBERT:

The Government announced yesterday, the Prime Minister, a crackdown on surcharges, credit card surcharges so that those businesses, retailers and others only have the capacity to recover their transaction costs. There's a suggestion that the former leadership and Treasurer was not going to pursue that particular recommendation but Mr Turnbull and Mr Morrison and your government that you have, is that true?

MINISTER O'DWYER:

I am not going to comment on discussions that have taken place before the announcement. What I can say is the government is completely united in this massive windfall for consumers. It is not right that consumers were being excessively charged if using their credit card for instance. It is not correct that they should be charged for doing what is more practical for many people in most instances paying with their credit card.  We are putting a stop to that, we are banning that, it is very clear, we have responded to consumer concerns around this issue, I think it is a massive win for consumers.

GILBERT:

So if a company wants to up the price on a certain product or service, they should be upfront about it and not hide behind the surcharges.

MINISTER O'DWYER:

Companies can charge for their services and for their products, we are not saying that they can't do that.  What we are saying is they can't pretend that it is to do with the way you are paying for that product or service.  You can't say that it is to do with the credit card fees if it isn't. You can only charge what you are being charged.

GILBERT:

One of the other issues with superannuation, just finally, and in the recommendation that the objectives soon to be legislated, can agreement be reached on that as to what it is all about?  Generally there is agreement that it is necessary but that overarching objective is possible and why is it necessary?

MINISTER O'DWYER:

We think it is possible and we are very happy to work with the Labor party, the Greens, the crossbenchers and all the interested stakeholders, let's face it every Australian has an interest in the superannuation system because at some stage all of us are going to retire and it is important that we have savings in our retirement.

GILBERT:

Why does an overarching mission statement– why does that, why is that necessary?

MINISTER O'DWYER:

It is necessary because it means slightly different things to different people and so much of our tax system, broader changes to the superannuation system, really hinges on what superannuation is all about, what it is there to do, and so we need to have everybody on the same page when it comes to that. We are happy to work with people, we think David Murray made a very sensible suggestion that it really should be about having an alternative to the Age pension or even the Part Pension that your superannuation should be able to pay for your retirement. We think that is a good start.

GILBERT:

The specifics of the default funds most award wages go into a default superannuation account, you want that to be opened up, greater competition, are you expecting a backlash from the union affiliated industry funds?

MINISTER O'DWYER:

We can't see why it should be an issue for them to have increased competition, why it should be a problem to have more transparency and more efficiency in the system, and why it is a problem to have choice. Every Australian should be able to choose what is best for them, for their family and for their circumstances, and for their retirement. We are simply saying that they should have that choice, they shouldn't be restricted. Currently at the moment if you are covered by an Enterprise Bargaining Agreement you are forced to choose one particular fund. It is not a choice, you are forced into it. We think that that is not right.

GILBERT:

They still perform quite well though, don't they - the industry funds?

MINISTER O'DWYER:

Under the Enterprise Bargaining Agreement that might not be right for your family, for your circumstances, you should be able to make that choice about what is right for you. So we are simply saying that all Australians deserve to make that decision themselves. Some will take that up, some won't but why should we deny them that ability.

GILBERT:

Assistant Treasurer Kelly O'Dwyer thanks so much for that, really appreciate it. Chat to you soon.

MINISTER O'DWYER:

Chat to you soon.