The Federal Government's posturing over the ban on exit fees is another case of lots of talk but insufficient action, according to The Nationals Senator for New South Wales John Williams.

Senator Williams has been a vocal critic of exit fees during his time in Parliament but says Treasurer Wayne Swan has backed away from taking the tough decisions on exit fees that Australians want.

He said to announce a ban on exit fees on new home loans from July 1^st next year is a cop-out.

"That is great for those in the future, but what about the hundreds of thousands of people who are locked in now at the mercy of the banks. Mr. Swan has not provided any Christmas cheer for them.

They will still fear bank rate rises above the cash rate increase and go through the stress of deciding whether to remain with their lender or pay an exit fee and move elsewhere for a better deal.

What about relief for small business, the sector that employs half the workforce?

This sector has been the whipping boy for the banks. A Senate inquiry into Access of Small Business to Finance heard that banks had widened the margin between the cost of their funds and the rate they charge small business on loans.

One of the committee's recommendations called for the abolition of exit fees on variable rate loans, but it is obvious small business is not important to the Gillard Government because Treasurer Swan has ignored it.

The Government should stop its reckless spending and borrowing which heats up the economy and will lead to upward pressure on interest rates", Senator Williams said.