The House Standing Committee on Economics released its report Better Competition, Better Prices: Report on the inquiry into promoting economic dynamism, competition and business formation on 26 March 2024.
After presentation and publication, a transposition error was identified in Recommendation 33 (at paragraph 6.106) resulting in repeated text in the first dot point of the recommendation. The recommendation, as adopted by the Committee, is meant to read:
Recommendation 33
6.106 That the Treasury Competition Policy Taskforce examine mechanisms to increase consumer engagement with mortgages and deposit products. Initially, this could take the form of pilots of one or more of the following:
- A requirement that banks reach out to variable rate consumers with older home loans (3 or more years) once per year to review their product, prompting them to consider both price and non-price factors.
- A requirement that banks should notify the base interest rate at the end of the introductory period where a retail deposit product is offered.
- A requirement that banks should clearly notify retail deposit holders of changes to their interest rates, changes to the eligibility requirements for a bonus interest rate and, where practicable, alert customers when they are approaching a threshold for eligibility for a bonus interest rate (e.g. a minimum balance level).
That APRA provide an independent benchmark (or series of benchmarks) for variable rates for new/switching customers over the preceding 12 months. That this benchmark be published for use by mortgage brokers and financial advisers to improve their capacity to contact new clients to improve churn rates.
The online version of the report will be updated once a corrigendum can be presented in the House in a future sitting week.
Further information on the inquiry as well as a copy of the report can be obtained from the inquiry website.
