The Greens will continue to push for new regulation on banks to place caps on savings account charges and ban $2 ATM fees.
The proposals, which will be welcomed by start-ups worried about bank fees, are part of a private member’s bill put forward by Greens leader Bob Brown.
The bill was put on ice due to the Federal Election campaign, but the Greens’ new position of power within the Labor administration has put the issue back on the agenda.
Speaking to StartupSmart, a Greens spokeswoman says: “There are a range of initiatives we are looking at and this is one we will continue to pursue.”
“(But) there’s a new (Parliament) sitting calendar so we can’t put a timeline on it.”
The Greens’ banking proposals class basic bank accounts as an “essential service” that should be delivered at a “reasonable cost”.
In practice, this means that a customer is offered an account with teller, ATM and internet access, along with a debit card with no ongoing fees.
The Greens also want to offer free ATM transactions at customers’ own banks, as well as a non-customer fee that reflects the “actual cost of service delivery”.
Along with the banking proposals, the Greens also plan to cap mortgage exit fees and to introduce a variable rate mortgage product that would only permit a “genuine change” in the lender’s costs to be passed onto customers.
The Greens argue that Australian banks should provide a fairer deal due to their large profits and the fact that bank fees in Australia are higher than in other parts of the world.
The party cites Fujitsu Consulting research that found that Australian households pay around $1,000 a year on bank fees, 22% more than the UK and 10% more than the US.
However, Steven Münchenberg, CEO of the Australian Bankers’ Association (ABA), says: “Before the election, the Greens identified a number of areas where they wanted greater intervention in banking – we have concerns with the practical implications and unintended consequences of their proposals, but will be seeking to work with the government and the Greens on those issues.”
“We are concerned about the Greens proposal to provide free bank accounts to everyone. Banks already provide free or low-cost accounts to low income earners – there is a cost in providing transaction accounts, if it has to be free to everyone, costs will have to be recovered from elsewhere.”