Mr HUSIC (Chifley) (10:31): I rise to speak in relation to the House of Representatives Standing Committee on Economics report that was tabled a few days ago, Review of the Reserve Bank of Australia annual report 2014. A number of things have been canvassed already by the chair in reference to overall economic conditions. What is interesting to note is that we keep being told that everything is rosy with the economy and that we have very little to worry about and we should stop talking the economy down, yet we continually get evidence that the economy is not performing in line with the claims being made by the RBA or the government. If things were going so well, we would not be having downgrades of Australia’s growth figures by the OECD or the IMF; we would not be in a situation where unemployment is affecting nearly 800,000 Australians, and we would be in a situation where wages would actually, at some point, start growing strongly.
For some time now, the concern has been that wages growth has been so muted that in fact it is at its lowest rate of growth since records began. If you are wondering why people are not spending and why businesses are not investing, one of the big reasons, I would imagine, is that people feel they do not have room in their household budgets to spend more. If they know that they are not earning more—if they know that their wages are not increasing—then it does act as a massive constraint on their ability to spend. It is wages growth that is required, more than anything else, to lift overall economic activity—particularly as we go through the transition from the mining boom to having the non-mining sector grow, and seeing investment grow in that sector is crucial.
One of the big things that is needed to underpin growth in the non-mining sector—and for quite some time it has been tagged as needing to grow—is dwelling construction. But if you look at the broader statistics, on not just construction but purchases, you can see that—as a result of banks starting to increase variable rates, ahead of the increased capital requirements that will be imposed on them from July next year—clearance rates at auctions have tanked. Back in June, they were at about 90 per cent in Sydney; recently they were a shade under 60 per cent. So something is going on out there that is not as rosy as is being suggested.
I do commend the Reserve Bank governor, though, in highlighting, as he has in a major speech in the last 24 hours, the need for investors in particular to start realigning their expectation of dividend growth, because, at the moment, a lot of public companies are pouring money into dividends and basically not taking the opportunity to ramp up business investment.
Again, there have been some concerns about the rate at which business investment is growing—or the lack of growth, more importantly, that will drive future economic growth. So there are definitely concerns there. There does need to be a lot more certainty. We are not getting that certainty with a new Treasurer who seems to jump from issue to issue within the space of a week, or defers big economic decisions, as we have seen in the release of the response to the Harper competition review in the last 24 hours, where yet again we are going to have another lengthy discussion about whether or not we will proceed on section 46 reform around the effects test after extensive consultation with industry. Instead of just biting the bullet, we have this dragging along.
One element of the recent hearing with the RBA that I was particularly focused on relates to the whole framework of payments as they are carried out in this country and as they are oversighted by the Payments Systems Board that sits within the RBA. The need for a more secure, stronger and more dynamic payments system is driving online commerce. It will be important in underpinning online commerce. The role of the PSB will take on greater significance in the years ahead. There have been some legitimate concerns raised about the transparency, openness and willingness of the PSB and the RBA to engage in meaningful stakeholder consultation.
I think the RBA has an attitudinal problem. I think the RBA needs to adjust the view that it takes to industry and stakeholder engagement. This was epitomised—and I was particularly concerned by this—by a comment expressed in an offhand way by the RBA governor during the hearings about dealing with industry. This is what he said in response to my concerns about the fact that industry was being asked to consult in a very rapid way, out of the blue, on reviews being undertaken by the PSB, with little formal warning and little time to respond, and in particular in the aftermath of the FSI that had already gone through extensive industry consultation as it was:
But other than the normal undercurrent of complaining on the part of various people that they do not like to be regulated, which is always there, I was not myself on the receiving end of complaints about timing.
Industry stakeholders need to have confidence that, if they raise things that are of concern to them that they believe need to be improved in the system, they need to have confidence that their concerns will be taken seriously. This is not the first time I have heard the Reserve Bank governor use these types of words in relation to complaints he receives from time to time or issues raised by people.
The RBA may be independent but it is not isolated from the community. It needs to be able to manage those concerns in a much better way and not be, dare I say it—and I am very cautious of the words I am about to use—dismissive of legitimate concerns that are raised. For instance, people have said that the PSB should be a lot more open in the aftermath of its own meetings. In fact, PSB representatives to the Senate economics committee suggested that after every meeting they put out media releases that spell out what changes are being made in the payments systems area. When I took them through their media releases post those meetings, I saw that, quite unlike the minutes of the RBA board that are released when making decisions on monetary policy, the PSB media releases are flimsy at best. They do not actually say what the PSB is considering.
I am led to believe that their most recent media release said that ‘the PSB discussed a number of changes at the recent meeting’ but would be ‘releasing details about that in a couple of weeks time’. Frankly, that is not good enough. If the PSB says that it is able to be transparent, open and forthright about the decision-making processes being undertaken within a board that is responsible for a massive area that underpins online commerce, then they need to do better. And they are simply not. That is the proposition I air in this House. I believe they need to put their hearts more into the consultation process with industry. This sector of industry—the sector that is facilitating payments—is going to be massively important to the economy. They do not deserve to be treated as if they are some sort of complaint generator, which the Reserve Bank described as ‘the normal undercurrent of complaining’. They deserve a better attitude from the RBA, frankly, than what has been displayed so far.
It will also be interesting to see what comes as a result of some of the Senate inquiries into credit cards and the way in which the PSB manages that process. There have been some views aired that the PSB may need to be taken out of the control of the RBA and put into another regulator. I am not yet convinced that is the best way to go, because I think payments should sit within the central bank, but people who are arguing the case for taking the PSB out of the RBA have their argument strengthened when they see some of the dismissive attitude by the PSB, including the failure to move and the failure to be transparent. The case being made to get them out of the RBA is strengthened by the PSB’s own actions. I certainly encourage them to do that. I would also encourage them to keep the competitive spotlight on sections of the banking industry that refuse to embrace innovation and change.
I recently started trialling the Apple Pay system that is available on most iPhones. It is only available to customers of Amex. The reason is that the banks are withholding the ability for iPhone and Apple to use that as a payment platform. The PSB can certainly look at that and can continue to keep the focus on the banks. (Time expired)
Federation Chamber adjourned at 10:42