Regulation is the new black

Nov 2, 2010

First Published on The Drum 02/11/2010

Joe Hockey is swanning around the airwaves like the coolest kid at school, convinced he’s discovered a new fad that’s sure to catch on. It’s called regulation and it rocks.

Of course many old hands may wonder whether all Joe has done is stumble upon a bit of retro, like some early Midnight Oil recordings, but right now Joe is stoked, he’s got a new tattoo and everyone is checking him out. Even the Greens want to play with him.

Still, if the old post-election cliche that the ‘people always get it right’ has any sort of credibility, Joe’s biggest risk is he’ll soon be overtaken by a bunch of converts who want to take the trend way more seriously than a wide-boy with a beat-box can.

As the latest Essential Report shows, there are votes to be won in regulating the bastard banks, especially in a week when Westpac is tipped to tip the Big Four’s profits over the $20 billion mark.

Q. Thinking about banking in Australia, do you think there needs to be more or less regulation of banks or is the present level of regulation about right?

Total Vote Labor Vote Lib/Nat Vote Greens
Needs to be more regulation 64% 68% 67% 57%
Needs to be less regulation 4% 2% 5% 4%
Present regulation about right 20% 20% 20% 35%
Don’t know 12% 10% 8% 4%

But Joe and his mates in the Liberal gang need to be careful what they wish for. Like most trends, you can’t just wear the T-shirt, you need to live the life. Indeed, Hockey-nomics seems decidedly low voltage when you look at some of the ideas for regulation that really get the crowds rocking.

Q. Would you support or oppose the following regulations for Australia’s banks?

Total support Vote Labor Vote Lib/Nat Vote Greens
Stopping banks from sending jobs off-shore 83% 85% 85% 83%
Only permitting banks to change interest rates in line with Reserve Bank rates 82% 87% 82% 73%
Capping bank CEO’s salaries 84% 88% 83% 86%
Ensuring bank fees are not higher than the actual cost of the service 91% 93% 93% 90%
A requirement to let customers know if their personal data is being sent to other countries for processing 93% 94% 93% 94%
Tougher rules about giving loans and credit 74% 71% 80% 77%

What’s striking about these figures is that support for banking regulation is not a left-right thing – there is deep support across the political divide. Post GFC, the electorate seems to be dancing to a brand new tune.

For 25 years the major parties have worshipped at the alter of TINA – There Is No Alternative. The logic has applied to deregulation, privatisations and above all the removal of government form industry protection.

TINA was never going to win beauty contests, but it was fair to say the punters recognised they benefited from fashions like dollar-floating. Governments won elections on economic management – which roughly translated to allowing the markets do what the markets will do.

Now the public wants something a little more folksy – the type of thing Joe and his mates used to call names like ‘socialist’.

Q. Would you support or oppose the establishment of a Government-owned bank to compete with the private banks?

Total Vote Labor Vote Lib/Nat Vote Greens
Total support 62% 68% 60% 72%
Total oppose 17% 14% 21% 16%
Don’t know 22% 19% 19% 13%

Indeed, the idea is already being tried in New Zealand where the government has transformed its post office into network of banks And it’s unlikely the senior NAB managers who recently joined Australia Post did so because of their love of philately.

Finally, if this Regulation fad is really going to take off, there’s another industry in town, with many of the characteristics of the banking sector, but a far more willing mosh-pit for those who really want to fight the machine.

Q. Rupert Murdoch owns most of Australia’s metropolitan newspapers including the Australian, Herald Sun, the Telegraph and the Courier Mail. Should the Government allow one company to own the majority of Australia’s major newspapers?

Total Vote Labor Vote Lib/Nat Vote Greens
Should allow 15% 13% 20% 12%
Should not allow 50% 56% 47% 56%
Don’t care 26% 24% 25% 26%
Don’t know 9% 8% 8% 6%

If Joe really wants to be a trend-setter, opportunity knocks.

Peter Lewis, Director, EMC