Borrowers slam banking reforms
More than 80 per cent of Australians believe the federal government’s latest banking reforms do not go far enough to help home borrowers.
According to a recent survey conducted by Mozo, Australians are cynical about the effectiveness of proposed measures to give the Australian Competition Consumer Commission (ACCC) more power to investigate price signalling by the banks.
Only 16 per cent of borrowers agree that greater intervention by the ACCC and increased industry competition will lead to lower home loan rates, while 84 per cent of the survey’s respondents said the government’s proposed bank reforms will not be effective in keeping home loan rates down or in curbing the behaviour of the big four.
When asked what additional steps the Government should take to reform the banking industry, 67 per cent of borrowers still believe the reforms should include a super profits tax on the big banks, despite predictions from some banking experts that this could lead to increased interest rates.
Mozo’s managing director Rohan Gamble said the government failed to capitalise on consumer sentiment for serious banking change.
“It is abundantly clear that the vast majority of home borrowers see the reforms as a copout that will not change the behaviour of the majors in any meaningful way,” he said.
But despite widespread cynicism towards the reforms, Mr Gamble said almost 25 per cent of borrowers had identified that they would switch to a credit union or building society from July 2011 when exit fee bans and other switching measures take effect.
“Although borrowers are clearly disappointed with the government’s weak effort, it is encouraging to see that one in four home loan customers are more likely to switch to a more competitive lender as a result of the reforms.
“At the end of the day, real banking change will only happen if consumers themselves start becoming more proactive about getting a better deal.”