2 November 2017
Transcript - #2017212, 2017

Interview with Chris Smith, 2GB

SUBJECTS: Mandating Comprehensive Credit Reporting; citizenship

CHRIS SMITH:

Treasurer Scott Morrison is on the line right now. Treasurer, welcome to the program.

TREASURER:

G'day Chris.

SMITH:

Now, I had to take that double take this morning because I shook my head and I thought to myself, 'hang on, Governments only take from us, they don't give us anything.' There aren't too many carrots. There is lots of stick but hardly any carrots. Is this the real deal?

TREASURER:

It is and I know technological change and these sorts of things can sometimes make people pretty uncertain but there is also an upside and in the financial services industry, in the banking industry, one of the things is that if people can get access to the good things that you have done as a customer well you should get a better deal.

SMITH:

Yes.

TREASURER:

That's how it should work and for many, many years it has been hard to make that work because of the technology. What this does is by making sure that your positive credit history is out there – not just the negative, the positive, because the negative is already out there – you will be in a position to say, I am a good customer and if you are not going to give me a better deal than this group over here will and that is how it should work.

SMITH:

I think some of these roads and traffic authorities in some of these states and territories might heed some of this about those who don't lose points should get a little bit of a discount too but anyway, that is for another day. So, explain to me, the banks use credit agencies to check whether you are a good customer to get the next loan or next credit card, right?

TREASURER:

They check to see if you have been a bad customer. Now, if you are not a bad customer then you are just lumped in with everyone else but if you are good customer no one really knows how good you are and what this means is it's not just the banks, other banks who will know how good a customer you have been but all of these other new players that are coming into the market and smaller banks. I want to see more competition in the banking system. I want to see the big banks put under more pressure. Not for any other reason than I want the customers to get a better deal and with the way technology is working and the way you can even get credit these days through applications on your phone and all of this, what those companies need is better information. You don't want them out there making bad loans, you want them making it on good information. This just means there will be more good information in the system, which means better loans, better prices, more opportunities, more competition – it's a win-win.

SMITH:

So, this is interesting because I had a credit card, I have had a few credit cards but I had one particular credit card where I didn't pay on time say five – six years ago but for 30 years I have paid on time each and every time whether that be a big amount or a small amount. That is where I could possibly get a discount?

TREASURER:

Yes, and I am glad you made this point. For those who maybe in the past went through a bad patch and you know it happens to everybody at some point and for some more than others. When you get your act together you should have that recognised and what this does is, yes currently they will know that five, seven years ago you might have lost a job or you might have had a relationship breakdown or something like that and you went through a bad patch but since then you got your life back together, you are paying your bills, you are paying your mortgage, you are paying your credit cards. This allows you to get back into the system which you are currently locked out of and this is why I think it is fairer. It's why I think it is more pro-competitive and at the end of the day it is best for the customer. It's an obvious reform but it is one we have been working to for a while. In the Budget I said I will leave it to you banks, you have got to get to 40 per cent by the end of the year otherwise I am going to make you do it.

SMITH:

Ok, so there are two variables here, the first variable is that credit agencies have to release the information to the banks and the borrowing agencies that we deal with. Will they do that and are you going to make that law?

TREASURER:

Yes we are and it will be law for the major banks. They will have to release the positive credit information to the agencies from 1 July next year and it will build up from 50 per cent to 100 per cent. So, it is a big change and you have got to do it sensibly and whether we extend that then to other smaller banks and so on well we will take that decision next.

SMITH:

So, you create competition, better competition. Are you just presuming that the banks will therefore give us a discount because of our background, our payment history or are you trying to make this a rule, a regulation within the banking system?

TREASURER:

Well, the information will be mandatory but the other people who will get access to this information are the other people competing with the banks, who currently can't get a look-in, and this information will enable them to actually be offering products. So, if your bank isn't giving you a better deal, there'll be other people who will be because we're playing up the banking system to see more entrants come in, more new players come in and to create more of that competition.

SMITH:

But you can't guarantee that they'll start giving us discounts?

TREASURER:

In the same way if five shops open up on the same street and they're all selling the same thing, we all know what that's going to mean for prices. That's how it works and this is the same. We live in a market economy and this is very true to Liberal values, it's about personal responsibility, it's about where you do the right thing and you pay your credit and opening up the market so more people can offer you services, that's what we're about. That's what we're doing and that's how it always works in favour of the customer.

SMITH:

Okay, we'll see how it plays out. I like the idea, I like the framework and, hopefully, a little bit of carrot and less stick will be something that we could all do with. Now, the Prime Minister today ruled out the possibility of an audit on members of Parliament over dual citizenship. Are you on his side?

TREASURER:

We've wasted enough time over this. It is a big shock to the system, the High Court has made a decision, everyone know what the rules are, people should comply with them, we all have lots of things that we have to comply with as members of Parliament – a disclosure of interests, office of profit under the Crown, there's a whole range of things – and the idea that there be some sort of star chamber looking into people's 'ancestry.com' and spending a whole lot of public money on this is, I think frankly, a waste of time.

SMITH:

But what we know now, especially in the last 48 hours, is that some politicians either tell porkies or keep information up their sleeves so they only release it when they're forced to. This is the problem, the public think to themselves, "Well, hang on. There must be other MPs who have dual citizenship but they're not saying anything." We've got to get this out of the way…

TREASURER:

I think it is out of the way. The people who have had problems with this have self-identified, referred themselves to the High Court or resigned.

SMITH:

Are you saying there wouldn't be a Liberal or a Labor member of Parliament…

TREASURER:

[inaudible] …they identified themselves.

SMITH:

So we've got them all, do you think?

TREASURER:

It's up to every parliamentarian to make sure they're compliant. It's up to every Australian that they pay their taxes too and we do that…

SMITH:

It's such a distraction as well, at the moment.

TREASURER:

That's why I say we should stop being distracted by it. When I move around Australia, what people talk to me about is jobs, not my genealogy…

SMITH:

Yeah, true.

TREASURER:

You know why I'm worried about Bill Shorten if he became Prime Minister? It's not that one of his parents were English. It's that he wants to put a $150 billion of extra taxes on our economy…

SMITH:

Exactly.

TREASURER:

Including increased taxes on housing, on investment, on small businesses, on family businesses, on your earnings, on your superannuation, that's what he wants to do.

SMITH:

Yeah, it's a low priority. Absolutely, but it keeps raising its ugly head though, Treasurer.

TREASURER:

As long as people keep banging on about it that will be the case, but I'm not distracted by it…

SMITH:

Are you upset about the Speaker in the Senate for holding on to the information as long as he did?

TREASURER:

I'm disappointed, sure I am, but what am I going to do about it? People expect me to go to work every day and make sure we're growing the economy and people can have jobs and we can lift wages. They don't expect me to be logging on and checking out people's genealogies every day. So I know it's an important issue and all parliamentarians should comply with the obligations they have under the Constitution, but this is sort of turning into one of those Canberra bubble things, where the media gets terribly excited about this, but frankly, Australians are more interested in their jobs, their small businesses, their wages, their kids going to school, getting to the hospital, having access to healthcare and that's what – look, we've got to get back onto this. You've got to get back to those things, I'm certainly back there and so is the Prime Minister, and I think people are more interested in that than they are about this sort of reality television show way of covering this thing.

SMITH:

The whole of Parliament is often a reality television show.

TREASURER:

On occasion, mate. I think people could be forgiven for thinking that. The serious business of what we've got to do, as I say, we don't need an 'office of the public genealogist' here. Bill Shorten already wants an 'office of the public engraver' going around and rewriting statues all around the country. I don't think we want to extend that to genealogy witch hunts.

SMITH:

Good to have you on the program, thank you for your time.

TREASURER:

Thanks, Chris, always good.