Same spin, different leader. Existing mortgages will not be protected from excess exit fees

June 28, 2010

Federal Labor’s announcement on mortgage exit fees shows the Hollowmen remain in control of the Government despite a change in Prime Minister, Shadow Minister for Consumer Affairs Luke Hartsuyker said today.

“Julia Gillard has failed another test in trying to distance her leadership from Mr Rudd’s failings,” Mr Hartsuyker said.  “Like Mr Rudd she has fallen into the trap of being all spin and no substance.  It’s the same spin but it’s a different leader.

“By claiming ASIC will protect mortgage holders from excessive exit fees she has misled the Australian people. The reality is that existing mortgagees will not be protected by any new laws. The new laws will only apply to those mortgage contracts signed after July 1, 2010.  Labor’s announcement is an insult to the 2.5 million Australians currently paying off a mortgage.  In the quest for a headline Julia Gillard has revealed she will continue Labor’s commitment to spin the truth and treat Australians with contempt.

“The truth is that Labor has a history of failing to deliver on reigning in bank fees. Who can forget Wayne Swan’s bank switching package in 2008 which amounted to nothing more than a website and a requirement for banks to give clients a list of their fees.  Swan’s package was nothing more than a con on Australian bank consumers.

“The Coalition supports any action to improve the competitiveness and fairness of Australia’s banking system and we supported the passage of the national consumer laws through Parliament.  However, Labor has shown no proof that these laws will result in improved mortgage competition and are once again only interested in the headline rather than the substance of their proposals.

"This announcement is hardly news. The two pieces of legislation which the Minister refers to were passed by the Parliament months ago. The changes in consumer law contracts refer to legislation already passed by the Parliament with bi-partisan support and only represent a nationalisation of state based laws. All ASIC has done is issue a consultation paper about how they will provide ‘guidance’ on the law.

“All consumer contracts with unfair and unconscionable terms will be unlawful under the uniform system. Gillard is linking these laws to mortgage exit fees to make it look like Labor is actually doing something about bank fees.“