The Coalition has used an ANZ credit card interest rate cut of 2% as evidence that its oversight of the big four banks using a parliamentary committee is working and a royal commission is not needed.
Malcolm Turnbull and LNP MP Scott Buchholz, who sits on the house joint standing committee on economics, welcomed the cut as pressure continues to mount on the government and the big four banks for a royal commission.
Buchholz, a member of the parliamentary economics committee, has recommended any credit card customers unhappy with their current interest rates move to the ANZ.
Buchholz said although the standard variable interest rate had dropped to follow the cash rate, historically, credit card rates had not fallen.
After ANZ cut its platinum card by 2% to 11.49% on Saturday, Buchholz said ANZ showed commercial courage in making the move, which would cost the bank $25m a year.
“[ANZ] have showed commercial courage in this space and leading the charge on dropping their rates first and I would encourage anyone who has got a credit card in Australia if they are not happy with the interest rates they are paying in Australia at the moment, to migrate to the ANZ,” Buchholz told the ABC.
But the government remains under pressure, with the Greens, Labor, Bob Katter, the Nick Xenophon Team, One Nation and independent Jacqui Lambie all in favour of a royal commission into the banks.
In expectation of sustained pressure, the Australian Bankers Association announced the appointment of the former Queensland Labor premier Anna Bligh as its chief executive.
The government has rejected calls for a royal commission, instead implementing a six-monthly review by the parliament’s economic committee with appearances by the big four bank chief executives.
Buchholz insisted he would use the coming appearance of the banks in March to place further pressure on the Commonwealth, Westpac and the National Australia Bank to follow ANZ’s lead on credit card interest rates.
“Pressure was brought about on the banks in that [first] inquiry and again, we will have the banks appearing early next month in the next fortnight in Canberra along with the Australian Banking Association and I will take a similar line of questioning with those banks that haven’t taken the commercial choice to shift their interest rates yet,” Buchholz said.
Malcolm Turnbull said the economics committee had provided real results.
“I am bringing the banks regularly before the house economics committee and they are being held to account for their actions and you are seeing real results,” Turnbull said on Sunday.
As the Coalition resisted a royal commission, the possibility of a rare parliamentary commission of inquiry remains a live option. A commission of inquiry, used only once before to investigate former justice and Labor minister Lionel Murphy, differs from a royal commission only in that it reports to the parliament instead of executive government.
The Greens briefed Senate crossbenchers on the details of a commission of inquiry, which could see an investigation run by three judges appointed by the Senate.
Such commission would have likely have support in the Senate but would need two Coalition MPs to support it in the lower house. LNP MP George Christensen told Guardian Australia he would support a commission of inquiry in the absence of a royal commission. But no other Coalition members have yet indicated support for such an inquiry.
Fellow Queensland LNP MP Warren Entsch, who has long pursued the banks on behalf of victims, remains in favour of a tribunal that can levy enforceable financial penalties on banks rather than a royal commission.
Entsch would not support a commission of inquiry at this stage.
Entsch would like to see a tribunal award penalties set at three times the amount of the financial damage sustained by customers, if the bank is proven to be negligent.
He said one of the victims had sustained financial damages of more than $100m for the loss of his civil construction company. He said the victim had cancer and any royal commission would take too long.
“We are starting to see the ads, the banks are clearly starting to get the message but if you really want to change the bank culture, you have to hit in them in the back pocket, in the wallet,” Entsch told Guardian Australia.
Entsch said he believed the prime minister was in favour of such a tribunal, even though the Coalition appeared to walk away from the idea late last year after an interim report by the Ramsey review into the dispute resolution process for bank complaints.
View all comments >