This Budget is the next stage in the Government's economic plan, building on commitments from the 2016-17 Budget and the 2016 election.
More competitive banking
Ensuring customers can get a better deal
Australia’s financial services sector, with the four major banks at its core, is highly concentrated. The House Economics Committee’s Review of the Four Major Banks determined the major banks have significant pricing power, which benefits shareholders at the expense of their customers.
To support economic growth and deliver better outcomes for consumers and small businesses, the Government is announcing a number of reforms to boost competition in financial services.
To increase consumer choice and competition in banking, the Government will introduce an Open Banking regime in Australia, which will give customers greater access to, and control over their banking data.
The Government will be taking action to encourage new entrants into the banking sector. APRA is also reviewing its bank licensing processes to make them more accessible to new entrants.
This will complement reforms the Government is pursuing to facilitate innovation in the financial system, such as enhancements to the regulatory sandbox for financial technology start-ups and a legislative framework to allow crowd-sourced equity funding for proprietary companies.
To promote a more systematic approach to monitoring and identifying opportunities to improve competition, the Government has tasked the Productivity Commission to commence a review, on 1 July 2017, of the state of competition in the financial system.
This review will be supplemented by regular in-depth inquiries into specific financial system competition issues by a dedicated unit of the Australian Competition and Consumer Commission.