5 years ago
PRICING FOR OVERSEAS MONEY TRANSFERS
TONY BURKE MP
A Shorten Labor Government will make it cheaper for Australians to send money overseas to loved ones by helping drive down international remittance and transfer fees.
Right now, many banks and money transfer companies are confusing customers with a mix of fees and exchange rate mark-ups. The result is that it is almost impossible to compare the true cost of transferring money overseas. By befuddling this customers, these organisations are making it harder for customers to shop around. Australians are being overcharged by millions of dollars for sending money overseas.
For example, one major bank’s website misled customers by saying ‘when transferring money overseas by the internet, we charge a fee of $20’ – neglecting to mention their exchange rate mark-up.
Labor wants to ensure that Australians who send money overseas get a competitive deal. That’s why a Shorten Labor Government will require remittance providers to disclose the full cost of international remittances prior to remittance, bringing it into line with comparison rates Australians already enjoy when shopping for car loans, mortgages and credit cards.
A Shorten Labor Government will task the Australian Competition and Consumer Commission to determine if misleading ‘no fees or charges’ advertising by remittance providers can be controlled using the Australian Competition Law, or if further enforcement mechanisms are necessary.
One study found that a person who tries to send $1000 from Australia to a developing country will see $77 eaten up by transaction fees and exchange rate spreads. A full-time worker who wanted to send half her salary home would be toiling away for more than a week every year just to pay financial middlemen.
The problem has become so bad that we have been told about migrant workers who want to send money abroad to support their families, and find that the cheapest way to do it is to pack the cash into a suitcase and take it with them on the plane. Even aid agencies have been affected.
According to the World Bank, Australia is the fourth most expensive G20 country to send remittances from. For every $1000 money transfer, Australians pay $23 more than the Americans, $9 more than the British, and $4 more than the Canadians.
Labor’s policy is the result of roundtables in Sydney, Melbourne and Brisbane, and consistent engagement with money transfer experts and the nation’s multicultural community, including Pacific Islander, Filipino and African community leaders.
International money transfers need to be carefully monitored and Labor will not support any change that would in any way jeopardise national security. Instead, Labor’s policy will help developing nations. In recent years, Australia’s annual aid budget has been cut by about one-third, to $4 billion. By contrast, our remittances now amount to $16 billion. Not all of this money goes to developing nations, but Australian remittance flows include $2 billion to India and $1 billion to the Philippines.
Right now, many banks and money transfer companies are confusing customers with a mix of fees and exchange rate mark-ups. The result is that it is almost impossible to compare the true cost of transferring money overseas. By befuddling this customers, these organisations are making it harder for customers to shop around. Australians are being overcharged by millions of dollars for sending money overseas.
For example, one major bank’s website misled customers by saying ‘when transferring money overseas by the internet, we charge a fee of $20’ – neglecting to mention their exchange rate mark-up.
Labor wants to ensure that Australians who send money overseas get a competitive deal. That’s why a Shorten Labor Government will require remittance providers to disclose the full cost of international remittances prior to remittance, bringing it into line with comparison rates Australians already enjoy when shopping for car loans, mortgages and credit cards.
A Shorten Labor Government will task the Australian Competition and Consumer Commission to determine if misleading ‘no fees or charges’ advertising by remittance providers can be controlled using the Australian Competition Law, or if further enforcement mechanisms are necessary.
One study found that a person who tries to send $1000 from Australia to a developing country will see $77 eaten up by transaction fees and exchange rate spreads. A full-time worker who wanted to send half her salary home would be toiling away for more than a week every year just to pay financial middlemen.
The problem has become so bad that we have been told about migrant workers who want to send money abroad to support their families, and find that the cheapest way to do it is to pack the cash into a suitcase and take it with them on the plane. Even aid agencies have been affected.
According to the World Bank, Australia is the fourth most expensive G20 country to send remittances from. For every $1000 money transfer, Australians pay $23 more than the Americans, $9 more than the British, and $4 more than the Canadians.
Labor’s policy is the result of roundtables in Sydney, Melbourne and Brisbane, and consistent engagement with money transfer experts and the nation’s multicultural community, including Pacific Islander, Filipino and African community leaders.
International money transfers need to be carefully monitored and Labor will not support any change that would in any way jeopardise national security. Instead, Labor’s policy will help developing nations. In recent years, Australia’s annual aid budget has been cut by about one-third, to $4 billion. By contrast, our remittances now amount to $16 billion. Not all of this money goes to developing nations, but Australian remittance flows include $2 billion to India and $1 billion to the Philippines.