Banking and Financial Services


May 23, 2017

 I thank my friend the member for Perth for raising this important issue in this afternoon’s debate on the matter of the banks. And what a performance by the member for Goldstein! I mean, seriously: we have seen reports today that there is a $2 billion hole in the government’s bank tax, a black hole. It is also a big lie. Australians will find out that the coalition government has lied to them. The first big lie is that there is a $2 billion hole in the revenue. Research by Morgan Stanley states that disclosures by the banks confirm that a levy of six basis points will not raise enough to meet the government’s revenue-raising objective. That is the first big lie. The second big lie: the government has made the levy tax-deductible, because they were strongarmed by the banks. What a big capitulation by this shambles of a government. Thirdly, this is all wrapped up in the fact that they are too gutless to hold a royal commission. What an absolute shambles. What a mess.

Regardless, we know that there is this significant problem that is literally being ignored by this government: the misconduct in our banking sector—and it is something Australians have every right to be concerned about. We have all seen the criticisms in the media about the banking sector, which, rightfully, have raised considerable disquiet across the community. I doubt there are members in this House who have not had constituents come into their office to tell them about their experiences with their bank and the issues they face. I have certainly seen my fair share, and I have been in this place for only nine months.

Substantial numbers of incidents refer to the problems that people have, particularly with the big four banks, as the member for Perth has outlined. The vast majority of Australians bank with those top four banks, some 75 per cent of the market share. Such an extreme concentration alone would probably justify the significant oversight and ongoing scrutiny of the big banks. But how can anyone not demand action when we see examples of retirees having their retirement savings gutted, families being rorted out of hundreds of thousands of dollars, small business owners who have lost everything and life insurance policyholders who have been denied justice? One is Mr Pashalis, a man who was denied a payout by CommInsure after being diagnosed with terminal leukaemia. Mr Pashalis was offered a settlement by CommInsure only after the media exposed internal documents suggesting the repeated use of delay tactics to avoid paying out claims and the use of questionable and outdated medical definitions to deny him and other customers their fair due.

The tales of misconduct which come to light more and more often make this matter too egregious to ignore. To be clear, Labor supports a strong and profitable banking and financial services sector. We know the banking sector is crucial to our economy. But Australians need to have confidence in their banks and financial institutions to uncover and deal with unethical behaviour that compromises that confidence. We will never support practices, systems or cultures that allow consumers to be ripped off, small business owners doing the right thing to lose their livelihoods and retirees to lose their life savings. So Labor went to the polls last year promising that we would have a royal commission into Australia’s banking and financial services sector. But we did it because the number of scandals, and the many examples of misconduct and poor practice, simply demanded a response—something that this government is incapable of providing.

To be sure, media scrutiny has uncovered a lot. The media have fulfilled their role. But a comprehensive commission of inquiry is the only way to properly address the rip-offs, scandals and misconduct that we have seen in this sector over recent years. We simply need to get to the bottom of the systemic and cultural issues in an independent, thorough and transparent way. I do not understand why those opposite do not see the logic of this. It is plain. It is right before them. But they are too stubborn.

Sixty-five per cent of all Australian voters supported Labor’s banking royal commission when it was first announced. So there is a clear and identifiable problem, which the government is ignoring. And we can see that a considerable portion of the public are justifiably concerned. They want action. Yet we have had nothing—no meaningful action; no steps taken by this government. Our Prime Minister is a former banker himself. There is nothing to stamp out the misconduct in this sector.

What we have instead is a joke of a so-called solution. When the Prime Minister called the CEOs of the big four banks to come before the House economics committee hearings, the hearings saw CEO after CEO refuse to answer direct questions, release important reports or take genuine responsibility for the failings of the banks.

The government are a shambles on this and on the bank levy, and they are doing nothing to stop the associated costs being passed on to customers. They are doing nothing to address the genuine issues in the banking and financial sector. They are merely tinkering around the edges and disregarding the public’s interests. It is a disgrace.