Adam Bandt (Melbourne, Australian Greens) Share this | Hansard source

The royal commission into misconduct by the banks was a once-in-a-century examination of the behaviour of Australia's financial sector. The Greens were the first party to push for it in parliament. We moved in the Senate to establish a parliamentary commission of inquiry. We managed to get bills and motions passed, including ones that came down here to the House. And then, under pressure, the government agreed to hold the royal commission into the banks. It clearly didn't want to do it, because not only have the big banks been some of the most generous donors to the government but there's also the revolving door: people come out of the big banks, come into the government and go back out again, and we've seen that time and time again. So the government was forced—forced—to take action to wind back some of the excesses of the banks.

When that scrutiny was applied—because the parliament, led by the Greens, pushed the government to do it—what did the independent inquiry say, when it looked into the illegal and unethical behaviour, in the pursuit of ever bigger bonuses and ever bigger profits, by the big banks? The royal commission uncovered a trail of destruction. Businesses had gone under, households were upended and lives were destroyed. After receiving over 10,000 submissions, after 68 days of hearings with over 130 witnesses, and after sifting through all the tales of woe and misery that people in this country suffered because the big banks were interested in doing nothing more than making a profit, the very first recommendation of the royal commission—recommendation 1.1—was that the existing responsible lending laws, which mean banks can't lend people more money than they have the capacity to pay back, should not be amended. That's recommendation 1.1: keep the restrictions on the banks that stop them from going out and engaging in predatory behaviour, where they find people who clearly don't have the capacity to enter into a loan, encourage them to do it and sign them up. Why? Because the bank makes money out of it.

It's no accident that this was the very first issue addressed by the royal commission, because it goes to the heart of the privileged role that banks have in our society and the sort of responsible behaviour that must accompany this privilege. Having the authority to take deposits and write loans against them is what sets banks apart. They get a licence to do it, under law, in a way that everyday people can't. They get a licence to do it, and it's what makes them so powerful. So it is no surprise that the parliament has previously said, and the royal commission has said: 'Don't let them abuse that power. Don't let them abuse that power by writing loans that they know people can't pay.' This is why there were responsible lending laws. If that's not clear enough, let me quote the commissioner's own words. Commissioner Hayne was unambiguous:

My conclusions about issues relating to the NCCP Act—

that is, consumer lending—

can be summed up as 'apply the law as it stands'.

It couldn't be clearer. That's the first recommendation of the royal commission.

So what's this bill doing? It's doing the exact opposite of what the royal commission recommended and repealing those laws so that the banks can go out and start making huge profits through unconscionable behaviour that up till now would have been illegal. So it's trying to make legal what at the moment would be outlawed behaviour by the banks and what the royal commission into the banks said should be outlawed behaviour by the banks. This bill is ripping up the responsible lending laws that Commissioner Hayne said should be enforced as they stand.

This bill confirms that the government never had their heart in the royal commission. They only did what they were dragged to do by this parliament. They established it to quell a bit of a backbench revolt, because certain members of the backbench knew that what the Greens and all of the others in this parliament were saying was right: that we needed a royal commission into the banks, because the banks had engaged in unconscionable behaviour where they abused the power that they had. Now this is happening under the cover of a pandemic. Can you believe it? The government are using a pandemic that apparently we've recovered from it and are world leading in, according to the Prime Minister. But notwithstanding that apparently we're on the other side, so we can afford to cut JobKeeper and JobSeeker—we've got to cut people's payments, because apparently that part of the pandemic is over—apparently we're in so much trouble that what we need to do now is to give banks back the power to write loans that people can't pay, just so the banks can make some big profits.

This bill would remove the responsible lending obligations for consumer loans greater than $2,000, and it would ultimately make it easier for the banks to lend someone $2 million than it would currently be to lend them $2,000. Under this bill, the vast majority of borrowers would not be provided with the most basic of consumer protections, which is that the product being sold to them is fit for purpose. That's all the law says at the moment: if you're going to write someone a loan, it's got to be fit for purpose. This removes that.

Instead of having a specific conduct regulator—that is, someone who can regulate the conduct of the banks, ASIC—resourced and empowered to oversee the suitability of a loan from the perspective of an individual customer, it's going to rely on APRA, whose role is to look after the financial system as a whole. Many people may not understand the significance of the difference between ASIC and APRA. APRA's responsibility is not to look after consumers. That's the end of it. That's the basic difference. Their responsibility is just to ensure the financial system stays stable. If banks make more profit out of this, APRA may well say, 'Oh, well, this is good for the banks.' It is not looking after the consumer. The government has instead picked a regulator whose responsibility is to look after the banks.

As is befitting of this government's ideology, this bill will just leave people to fend for themselves. It's just designed to let the banks get on with writing loans as big as they possibly can, whether it's good for people or not. The big four are treated as too big to fail, so for them the risk of default barely registers. They know the government will step in and give them a handout if they ever get in trouble. So basically this is subprime dreaming. This is to let the banks squeeze whatever profits they can out of consumers while they can. If and when the music stops, it'll be someone else's problem. It'll be left to the taxpayer and the public to pick up the tab when we see a repeat of the GFC.

That's what is worth remembering. We are seeing these laws because bank behaviour got out of control. That's why we put restrictions on the banks, and we saw that with the global financial crisis. Again, it was left up to the public to pick up the tab while the banks enjoyed all the profit and none of them suffered any consequences, and the executives went on to enjoy millions of dollars in bonuses. When we wound it in a bit and said, 'No, actually you can't write loans for people who are not going to be able to afford them,' that offered some protection to people in this country, and now this government wants to rip it up.

This bill is an insult to the victims of the banks and it is rewarding the banks' rapacious behaviour. It's the latest example of this government using COVID as a cover to wind back protections for individuals and give even more power to the big corporations and the superwealthy that donate to the government. They're trying it on with the repeal of responsible lending obligations, which will give banks a licence to engage in predatory lending, and they're trying it on elsewhere with industrial relations legislation which will entrench insecure work and keep wages low. They're trying it on with this bill, which will also water down requirements for banks to ensure, before they write loans, that those loans are fit for purpose.

When, in this parliament, all of the people across the political spectrum except for the government agree on something, it should tell you that the measure that people are lining up behind has the support of the people in this country. That's what we saw here. We saw a few government backbenchers speak up and everyone else across the political spectrum agree that we needed a royal commission into the banks because they were engaging in terrible behaviour, including predatory lending. When that royal commission reported and said, 'Keep some of the existing protections,' and the government said it was going to abide by and implement the recommendations of the royal commission, some people probably believed it. Some people probably went to the last election thinking the coalition government was going to honour its word when it said it supported the royal commission and was prepared to implement its recommendations. And now barely is the ink dry and the government wants to give back to the big banks at the expense of the Australian people. We cannot allow that, and that's why we will be opposing this bill.

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