Heritage Bank CEO John Minz today joined the call for an end to the “age of entitlement” for Australia’s four major banks.
Mr Minz said the current structure of Australia’s banking system gave consumers a raw deal, because the big banks enjoyed billions of dollars in taxpayer subsidies and unfair advantages over smaller financial institutions.
His comments came as submissions closed today (31 March) to the Federal Government’s Financial Systems Inquiry, which has been set up to lay out a 'blueprint' for Australia’s financial system over the next decade.
Mr Minz backed the submission made by the Customer Owned Banking Association (COBA), the peak body for customer-owned financial institutions in Australia, which highlighted the unfair advantages in the system that limits real competition for consumers.
“The Financial System Inquiry gives us a chance to build a better, fairer system for the future,” Mr Minz said.
“The current financial system gives Australia’s big four banks billions of dollars in funding advantages for free.
“We support COBA in asking for a system that supports genuine competition and leads to a better banking deal for our local community.
“Customer-owned institutions like Heritage Bank retain every cent of profit we make and do everything to give our customers the best value possible.
“The big banks make billions of dollars in profit each year for their shareholders, not for their customers. But we have to operate on a playing field that isn’t level and gives the big banks unfair advantages.
“Removing barriers and subsidies will create a more competitive system that will lead to a better banking deal for Australians and help smaller institutions like ours.”
The proposals for consideration announced by COBA include:
· A levy on the big four to pay for the taxpayer funded subsidy they receive;
· Better consumer information so Australians make informed banking choices;
· A banking regulator more focused on fostering competition;
· A tax cut on deposits to lift national savings;
· Equitable treatment and recognition of the customer owned banking model.
COBA has released detailed supporting analysis in its submission including material from the IMF, APRA and domestic and global research to support the case for change.
To read COBA’s submission visit www.balancebanking.com.au