Luke Gosling (Solomon, Australian Labor Party) Share this | Hansard source

The government are failing to protect consumers from the economic power of the banks—I think that is a truism. I am very pleased to join with the member for Perth on this, and at the outset I make it clear that Labor supports a strong banking and financial services sector; what we will never support, though, are dodgy practices that allow our fellow Australians to be ripped off. We will not allow Australians who have worked hard to save, small business owners and retirees to lose their livelihoods and their life savings.

Norma and Peter in my electorate are two hardworking people whose experience illustrates the need for a royal commission into the banking and financial services industry. They tell their story as they never want to see what happened to them happen to anybody else. Norma and Peter were told by their financial advisers that leaving their retirement funds in an account was a terrible use of their money and that they needed to do something more with it. They were lied to and urged to invest their $500,000 of retirement funds into a scheme. They did not suspect anything was wrong until a few years later when they had not received their distribution payment for that month and they began to get anxious about the solvency of their funds. Again they sought advice from their financial advisers, who said they could not get a safer investment. As they began to think things may not be right, they tried to withdraw their money and were told that their withdrawal was deferred for 180 days. Then they discovered they were not able to get one cent out of the scheme; Norma and Peter had lost it all. All their hard worked for retirement savings—gone. Norma and Peter were sucked in, ripped off and thrust back into the workforce in their twilight years. They were duped by dodgy advice from dodgy financial advisers to invest their retirement funds in dodgy deals. They were deliberately misled, and they deserve justice.

We need Australians to have confidence in their banks, financial institutions and advisers. We need to uncover and deal with unethical behaviour in our banks. We obviously believe that a royal commission into Australia's banking and financial services sector is the only way to truly get to the bottom of the rip-offs, scandals and misconduct. Retirees like Norma and Peter have had their retirement savings gutted. Families have been rorted out of hundreds of thousands of dollars. Small business owners have lost everything. Life insurance policyholders have been denied justice. The Prime Minister needs to take responsibility and call a royal commission. He needs to side with ordinary Australians and he needs to stop defending the banks.

In my electorate, I also have a constituent who was a financial adviser to one of the big four banks. He warns that any royal commission will need to be able to get to the bottom of dodgy practices, practices undertaken particularly by planners contracted to the big banks. The story of Norma and Peter is not a one-off—it is far from it. If those opposite were not so out of touch, they would know that to be true. The problems are systemic. That is why we need a royal commission.

The banks will blame customers: 'The customers were ignorant. They didn't understand what they were being told. They didn't ask the right questions.' The banks do not want customers to understand what they are doing at times—the ones that are not doing the right thing, that is. The royal commission needs to be able to get past any smokescreens. We need to concentrate on the ways in which the banks are being more responsible for ensuring the financial understanding and literacy of the customers they are dealing with. When the big four decide they are too big to worry about treating consumers well, treating Australians well, our whole country suffers. The government's reform is no substitute for a proper royal commission. Labor believes that a royal commission into Australia's banking and financial services sector is the only way to get to the bottom of these rip-offs, these scandals and the misconduct that we have seen in the sector over recent years. Recently the Prime Minister had the idea of bringing CEOs before committees to answer questions, and we saw that the answers just were not really there; they were not really forthcoming.

I have a final hot tip for those opposite. Your 'tough on banks' rhetoric is not believed by the Australian people. Give it up and sign up to a royal commission into the banking sector.

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