Tuesday, 12 February 2019
Matters of Public Importance
Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry
Last December I was contacted by the parents of a young man in my electorate who was given a $40,000 loan by one of the big four banks. At the time, he was sleeping in his car. He had precarious employment. According to his parents, 'his understanding of finance and law was minimal'. He now finds himself hounded by a debt agency for that $40,000.
The royal commission has revealed rorts, rip-offs and rigging: insurance sold to a man with Down syndrome, Indigenous Australians targeted for products they didn't need, fees for no service and dozens of criminal referrals. This was the report the Liberals never wanted us to see. Asked whether he'd call a royal commission, the Prime Minister described it as 'hollow, populist nonsense'. He said it would be a 'QC's complaints desk', a 'populist whinge' and a 'reckless distraction'. He said, instead:
… we have a tough cop on the beat in that area—it is called ASIC. We have a strong regulator—it is called APRA.
What did the royal commission make of arguments like that?
The Prime Minister said 'the banking sector is incredibly strong', another observation sadly at odds with the conclusions of Commissioner Hayne. It's no surprise that the Liberals fought so hard against the royal commission, given their track record, given their history. This is the party of Garfield Barwick. It is the party of the bottom-of-the-harbour schemes. The Liberals are the party that voted against Labor's Future of Financial Advice reforms in 2012, with Prime Minister Morrison calling them 'corner-cutting and heavy-handed regulation' that would 'tie businesses and consumers up in red tape'.
This is the party that in 2014 tried to water down the Future of Financial Advice reforms by removing the duty of financial advisers to act in the best interests of their clients. They wanted to remove the opt-in requirement. They wanted to allow conflicted remuneration. And you just have to look at their background. The member for Higgins, Senator Hume and Senator Sinodinos worked for the National Australia Bank before coming here. The Treasurer worked for Deutsche Bank. And in New South Wales they've just preselected for the Senate Andrew Bragg, a former Commonwealth Bank staffer.
It is no coincidence that the members for Goldstein, Fadden and Moore are currently embroiled in fundraising scandals involving finance. It is no wonder that Kenneth Hayne couldn't crack a smile for the cameras when handing the report to the Treasurer. Previously, we thought the Treasurer's most awkward moment came when he held a press conference with Jay Weatherill, but I think this one went just one better. As Bernard Keane wrote in Crikey:
For most of the last decade, the relations between the Liberals and the financial services sector have been beyond the ordinary relationship between business, which understandably favour more business-aligned parties, and politicians. The ties of money, personnel and aligned interest are deep and rich.
You see, now, the Liberals failing to implement the Hayne report in full. Labor, by contrast, will implement the Hayne report in full. We will do so because we have a strong track record of reform. In the teeth of the global financial crisis, over the objections of the Liberals, we banned mortgage exit fees. We encouraged competition in the banking market. In 2016 we announced our commitment to amend the Corporations Act, to encourage better access to finance for member owned firms. In 2017 the coalition said that they would follow suit. But they've done nothing.
I come back, again, to the victims of banking scandals in Australia—victims like David Harris, who had the Commonwealth Bank feed his gambling addiction, despite the fact that he said:
I explained that clearly I'm a gambler. I have a gambling problem. … I can't understand why they kept offering me more money.
Scandals like NAB staff accepting cash-stuffed envelopes in bribes, scandals like when Nalini Thiruvangadam sold her jewellery to pay a lemon loan and scandals like dole recipients who were flogged junk insurance.
You can't trust the Liberals. They never wanted the Future of Financial Advice reforms, they never wanted the royal commission and they will always fight against anything that disturbs their cosy relationship with the finance sector in Australia.