Tuesday, 12 February 2019
Matters of Public Importance
Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry
I have received a letter from the honourable member for Hotham proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The Government's failure to implement the recommendations of the banking royal commission after voting against it 26 times.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
It's a great privilege to speak for the opposition on this matter of public importance this afternoon. It's good to have that opportunity, because it allows me to respond to what I found to be some whacky and bizarre rewritings of history from the Prime Minister and the Treasurer opposite me during question time. Is the Prime Minister actually expecting Australians to now thank him for calling a royal commission? This is a royal commission that he voted against 26 times. What we know from media reports is that the Prime Minister was the last bastion, protecting the big banks in cabinet, against calling a royal commission. He spent the last years of his life as Treasurer of this country trying hand over fist to give the big banks a $17 billion tax cut, and now he's constructed a parliamentary sitting calendar that means we can't do anything about the royal commission recommendations for eight months. Here we are, in question time, and we've got senior members of the Liberal Party, who did everything in their power to protect the big banks, telling us that now they deserve a golf clap because they were the ones who called a royal commission. That was after—you'll remember, Deputy Speaker Hogan—the banks asked the government to call a royal commission.
There is a great deal more to say about the politics of this issue, but I want to open my remarks today by spending a couple of minutes talking about a group of people who have not got a lot of air time in this discussion about how to make banking more fair in Australia; that is, the victims of bank misconduct. Without these victims, there would never have been a royal commission in this country. We owe an enormous debt of gratitude to people who were wronged terribly by the banks and to whistleblowers who observed appalling conduct within the banks and had the bravery to come forward. Some of these victims have had to go through terrible emotional turmoil as they've had to relive some of the most difficult times of their lives. We're talking about emotional turmoil, financial distress and, sometimes, family breakdown—even mental illnesses that have plagued them for the rest of their lives. I believe Australia owes a great debt of gratitude to those people. Ten thousand of them made submissions to the royal commission. They did so with great passion.
I think we actually have a group of bank victims here with us today; there they are in the gallery. It'd be great for members of parliament to acknowledge those people there. Many of them have been fighting the big banks on disputes that have literally gone for decades. For some of the people who are up in the gallery right now, even though they were wronged by the banks, the banks have taken them to court and ended up bleeding them dry while they've sat through litigation after litigation. I have to say: we need to do a little bit more to hold the banks to account for the things that they've done. I want to particularly thank Michael, Selwyn, Craig, Bill, Rita, Caroline and Tony and the others who are gathered in the chamber today for their ongoing advocacy on behalf of all victims of bank misconduct.
If I can say one thing more about this group that's gathered here: they represent a very active community of people right around the country who have been pushing for a long time for bank reform. One of the things I'm really struck by when I sit down with these victims is that they often acknowledge it's not possible to rewrite history, to go back to the beginning of their case and to fix all of the bad things that happened to them. Their concern is about the future and thinking about other people who might need help too. Every time we have a bank victim round table, people talk to me about other people who have got it worse than them. I'm really touched by the attitude that they have.
It's stories like Rainer's that really drove home to me how important it is that we tackle misconduct and reform the culture in our banks. I want to tell you about this gentleman, who lives in my hometown of Melbourne. This is a fellow whose wife was diagnosed with cancer just after the birth of their second child. He went through genuine hell dealing with the Commonwealth Bank due to inadequate hardship policies. It included having to go back to work during the last months of his wife's life—there was no financial benefit in that for the bank, but that was what he was forced to do. It included the bank continuously calling his dying wife to talk to her about debts that she supposedly owed the bank. Other victims I've met with, like Paul and Liz Furneaux and Giulia Mandarino, have lost everything in their disputes with the banks. Some of them have lost homes. They still feel the physical and mental impacts of what has happened.
I do want to pay tribute to those victims and say that we haven't forgotten about them. There is more that needs to be done to assist them and their cases, and we are so genuinely committed to this task of making sure that we do have a fairer banking situation in this country. That was a big impetus for why Labor fought so long and so hard for a royal commission. Deputy Speaker Hogan, you would have seen that for almost 600 days we pushed in this chamber for those on the other side of the chamber to see what we saw—that is, that we had a banking system that was treating some Australians appallingly. They were doing it in a way that was sometimes breaking the law and there seemed to be no accountability.
What we saw on the other side of the chamber was incredibly disappointing, and it continues to disappoint me today. As a politician, I don't like to dwell on the past and I don't like to stand in this chamber and point the finger and yell at the other side about all the things that they've done wrong, but it does bother me and it does make me worry about the willingness of those on the other side of the chamber to actually have the grit to do what is in the royal commission's recommendations. I just don't trust them to do it—that's the genuine truth.
They have a terrible record when it comes to cracking down on bank misconduct. When Labor was in government, you might know that we introduced the Future of Financial Advice reforms. Indeed, the royal commission went to some lengths to talk about how incredibly important those laws, those Labor reforms, were. The centrepiece of the Future of Financial Advice reforms was the introduction of a best-interest test for financial advisers. What the parliament was saying for the first time was that financial advisers have to act in the best interests of their clients. Well, it sounds pretty obvious now, doesn't it? But what we found is that those on the other side didn't want it. They didn't want it when it was first introduced by Labor, and when they first came to government they tried to get rid of the best-interest test. How is it that they can possibly be plausibly trusted to implement the royal commission's recommendations when that's their track record? But, of course, that's just the very beginning of their fight to protect the big banks and other people in the financial services industry. This government, the Abbott-Turnbull-Morrison government didn't support the reforms. They fought all the way to stop them being implemented.
Labor came out quite a long time ago in April 2016 saying that we thought it was time to have a royal commission into our banking sector. What did we see from the other side? We saw a Prime Minister and his Liberals huffing and puffing and, frankly, embarrassing themselves in a rush to declare what a bad idea this was. We had the Prime Minister call this a 'populist whinge' and a 'reckless distraction'. It is very important that we in this chamber and the Australian people never forget those words, because the truth is that, even though after 26 times of voting against a royal commission they were finally pushed into calling one, their attitude tells us everything we need to know about the willingness of the people opposite us to hold the banks to account. Every day that the government delayed, more Australians were being charged fees for no service, more Australians were being sold useless junk insurance and more Australians were being ripped off by the banks. In that whole time, that whole 600 days that we were calling for a royal commission and all of those Australians were being ripped off by financial service providers, what was the government doing? They were using every political opportunity they had to argue to give the banks a $17 billion tax cut. That is, the taxes that everyone at home watching pays, the taxes that I pay, were going to be taken and given to the big banks as a tax cut. That was their response to all of the community outrage about what the big banks were doing, and now we're being called into this chamber and lectured from the other side about things to do with the banking royal commission. It beggars belief. We just can't trust them on it.
I want to cover a quick couple of matters, because I focused quite a bit on what happened before the royal commission reported, but now we have a royal commission report. The smart thing for a political party to do is to say, 'Yes, we're really in this fight and we're going to accept the recommendations and we're going to move forward.' But what we've had from the government is the exact opposite. We've had them use every little sneaky trick there is, even straight out of the blocks, to say: 'No, we're not going to do this; we're going to do it a little bit differently. We're going to do it this way and that way.' It just shows again that they can't be trusted.
With my remaining few seconds I want to mention one more thing: the part-time parliament. We had the opportunity to implement a lot of the recommendations in this report, but, of course, not all of them, because some of them do require a lengthy consultation process and some sober thinking time, but some of them are completely straightforward. In fact, the government claimed we can't implement any of them and then in the same breath told us that they are implementing some of them in the Senate. It's intellectually incoherent. It's completely ridiculous. What we say to those on the other side is: if you really think that we should believe that you've changed your mind, call an extra fortnight of sittings of this parliament so we can come here, do our jobs and pass the necessary reforms so those bank victims sitting up in the gallery aren't back here in a few years time complaining that nothing much has changed.
I acknowledge the banking victims in the gallery. My early life was defined by being a victim of one of the big four when my family, in the very early eighties, was encouraged to borrow overseas in unhedged Swiss francs and of course, when the spread increased, our family lost everything. We ended up settling with the bank literally on the top stair of the courthouse. Wacka Williams, my colleague in the Senate, was bankrupted by the same thing. So your pain is well felt. My young life was defined by this. So, as a government, we are not blind to what you've been through. I am not blind to what you've been through. The conduct of the financial institutions that should have known better was deplorable. They have let Australians down for decades. Go and have a beer with Wacka Williams in the Senate to get his view of some of the conduct of banks. After the post-GFC banking inquiries 10 years ago, Wacka and I worked with the then Labor government of the day on looking at reforms to this. In fact, the parliamentary inquiry into financial services, the Ripoll inquiry, had, I think, 11 recommendations on which we on the committee agreed with the government of the day, because it was that important. So my message to you as Assistant Treasurer is: we hear your pain, we understand it, and we are committed to doing something about it. Yes, there are politics of the day, and I understand that, but please, from me, don't underestimate our sense of compassion and what we want to do to try to help you.
It was a bruising royal commission: 68 days and 130 witnesses. I gather many of you were witnesses. Many of you were not able to be witnesses, but Hayne has given his assurance—and I think he is a fair man of integrity—that everyone's story was read and heard and listened to, and the report is comprehensive. It was a forensic inquiry into our financial system. The opposition has made it clear, through the shadow minister opposite, that Labor will implement all 76 recommendations, and the government has made it clear that we will act on all 76 recommendations. There is no question—you heard, and there is no question—that the government of the day, this government, will act, and we are seeking to act as quickly as possible. But it's important to also understand that we have acted. We haven't sat by as the commission unfolded. We recognised many of the faults that needed to be fixed. I was quite visceral on many of the faults that I wanted fixed.
So we've been acting, and some of the things this government has done are impressive. They would have helped me out. It's important, I think, that we understand some of the key things that we have done as a government, because we haven't been flat-footed. This is not a government that doesn't care. I understand the politics of trying to frame it like that, but nothing could be further from the truth. Go and spend some time with Wacka Williams. Speak to a senator sold up by a bank, bankrupted and tossed from his land, and you will hear the heartbeat of a bloke who does care, as do I and as does the human services minister next to me, who oversees Centrelink and sees the pain of hundreds of thousands of Australians who use those services and move through it.
It's why we moved to act on the Australian Financial Complaints Authority. It's why we've been working with Helen Coonan, the chair, for a scheme of last resort. We were working on it for months with Helen prior to the royal commission announcing. We're looking to better protect consumers. We've already banned excessive credit card surcharges. We've simplified calculation of credit card interest. We've banned unsolicited offers of credit card limit increases. We've established the Banking Executive Accountability Regime, which is a serious regime for banking executives so that they can't say to my family or to yours that borrowing overseas is secure when it's unhedged and can't sell you a product with guarantees that don't exist. But, if those things happen, there are penalties that involve jail time for executives.
We've established the Financial Adviser Standards and Ethics Authority. We've appointed second deputy commissioners to ASIC and APRA. We've required of administrators that significant financial benchmarks, including the bank bill swap rate, be licensed. We've made manipulations of any financial benchmarks a criminal and civil offence. We've increased APRA's powers over non-bank lenders and increased APRA's powers in the event of crisis. We've introduced industry funding for ASIC. We've removed ASIC employees from the Public Service Act so that they can employ the best possible people they need. We're now in the process of enhancing ASIC's ability to ban individuals and strengthening their ability to refuse and cancel licences. We're boosting criminal and civil penalties for misconduct, in some cases by 10 times 1,000 per cent. We're strengthening whistleblower protection, and this week we'll be introducing from the Senate the whistleblower regime—literally a world first in this space—and I'll be bringing forward on Thursday a raft of legislation concerning director identification numbers and combining 35 registers of business information into one to get greater transparency on this issue of who directors are, what they are doing and where they are going.
We've strengthened regulation of super funds, and there's more to do in the Senate. We're lifting governance standards for super funds. We're seeking to reunite people with their lost super accounts—and there's a lot of lost super; I'm talking billions and billions and billions of lost super that needs to be reunited with people. We're banning exit fees on super accounts, capping fees on low-balance superannuation accounts and extending unfair contract term protections for insurance. We're removing restrictions on choice of super funds, improving explanations of insurance products and imposing design and distribution obligations on financial products so that products cannot be sold to individuals like you and me that are not appropriate for us. To stop that poor advice, we're empowering ASIC to modify or ban harmful financial products.
These are things that we've already been doing. There's nothing new here. I haven't even got to us acting on the 76 recommendations of the royal commission. This is everything we've been doing to sort out some of this financial mess, because we care and we get it—we do. It's important to us. The action we're now taking on those 76 recommendations is substantial. In terms of the scheme of last resort with AFCA, that will go back 10 years, consistent with the period examined by the royal commission. We're compensating those individuals who have prior unpaid determinations in their favour by the predecessor bodies of AFCA, which will see almost 300 consumers finally receiving compensation totalling around $30 million as a consequence of prior misconduct.
We'll extend the jurisdiction of the Federal Court to cover corporate criminal misconduct, which will expedite cases that are considered by state courts and commonly take over two years to be heard. We're commencing a capability review of APRA, which will be led by Graeme Samuel AC, and conducting further capability reviews every four years. Commissioner Hayne's recommendations and the government's response advance consumers in four key ways. They will strengthen and expand protections for consumers, small business and rural and remote communities. They will raise accountability in governance standards that are fundamental to ensuring that we as consumers get the advice we need. They will enhance the effectiveness of regulators and provide for remedies for those harmed by misconduct.
The government gets it. We've heard the voices of those who have been affected. We have sought to act over the past few years in terms of progressively working to ensure a far better financial system. Do not be disavowed that this government does not hear you—it does; we get it. We get it personally, we get it collectively, and as a government we always have.
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.
The banking royal commission has exposed a lot of very poor and bad behaviour. There is no argument about that. But I just want to correct the record: I can't remember any previous 26 votes in this House blocking a royal commission. Do you know why, Mr Deputy Speaker Mitchell? Because only executive government can create a royal commission. Those we should be thanking are senator for Queensland Barry O'Sullivan; senator for New South Wales Wacka Williams; the member for Wide Bay, Llew O'Brien; and the member for Dawson, George Christensen, who actually put together a bill to put before the House for a commission of inquiry, which is a legal possibility through the House of Representatives. The former Prime Minister, the current Prime Minister, and the former Minister for Revenue and Financial Services have all admitted that they wished they had done something sooner. We have been arguing for this for a very long time, but, as the member for Fadden outlined, we had already taken substantial action. We created the Banking Executive Accountability Regime. We have got the Australian Financial Complaints Authority, and a whole host of other manoeuvres that the member for Fadden just outlined—on credit cards, on superannuation, on so many areas of financial services that need correction and betterment.
The banking system seemed to be working fine for banks, but in so many instances it certainly wasn't working well for customers. Friends, family friends, and professional acquaintances who I've personally spent a lot of time with in my life have come out at the bad end of advice from financial institutions, including banks—whether it was Swiss loans, as outlined by the member for Fadden; or having their farm or asset sold off once there was any hint of risk, only to have the farm or the asset sold in a fire sale, with the people involved in that advice being ultimately the purchasers of it.
We have done so much already. What about the other side? They're not immune. Previous governments have glossed over financial mismanagement and bad behaviour. Where was the other side when Opes Prime happened, or the Storm Financial crisis? They let that scourge through. Where was the member for Maribyrnong then? Where was the member for Lilley? They were in similar situations and they did nothing. But we received the recommendations from Commissioner Hayne, and the Treasurer put out the government response within a weekend. We are still waiting for a response from the opposition. They say in-principle support, but that is a very vague term. We want to know the specifics of what they are going to do.
First of all, we are improving consumer outcomes. We're putting in place a best interests duty. We're banning trailing commissions and volume based bonuses. The Treasurer already said that in his speech. We are going to review, after three years, the implications of getting rid of trailing commissions, because what we don't want to do is get rid of the broking industry and have everyone relying solely on the banks for advice about loans. As I mentioned, the Banking Executive Accountability Regime is being extended to the insurance industry and superannuation. ASIC should have joint responsibility with APRA in this space, and they will have the main regulatory oversight. There will be a separate board to oversight APRA and ASIC to ensure they're actually doing their job. Trustees and directors of superannuation funds will be subject to civil penalties for breaches of their duties. There is a new system for disciplining financial advisers, with stronger industry reference-checking and greater reporting, and serious compliance concerns will go to ASIC. There's a new disciplinary body with which all advisers must be registered. We have given extra funds, $170 million, to ASIC and APRA, and we have appointed new commissioners and deputy commissioners. ASIC— (Time expired)
Those in the Morrison government should really be ashamed of their lack of action in assisting people who have been victims of very poor practices from the banks. This government has clearly put the interests of banks ahead of the victims and working Australians. Just like everyone else in Labor and across the country, I am sick and tired of having to drag LNP members to do what is right when it comes to the banks. I was disgusted that Prime Minister Scott Morrison and the LNP members voted 26 times against the banking royal commission. Has the Prime Minister, Scott Morrison, or the Treasurer, Josh Frydenberg, apologised to the Australian public for voting against a banking royal commission? No, but clearly they should.
I was disgusted when the Prime Minister, Scott Morrison, and the LNP members voted to give the big banks a $17 billion tax handout whilst the banking royal commission was underway. I was sick and tired of having to fight the LNP Morrison government to extend the banking royal commission so as to allow the commission to travel to regional Queensland. The Morrison government ignored those calls and ignored regional Queenslanders. When I was first elected I was absolutely shocked at the number of people who came into my office with boxes full of paperwork, demonstrating how they had been victimised and had lost everything. I was sick and tired of having to fight for the banking royal commission report to be released. Finally, it has been, after all the rigmarole. After the constant dragging of Prime Minister Scott Morrison and the LNP to the table to do just what was right by the Australian people instead of their big-profit, best-friend bankers, we finally got the report.
You would think that Australian workers, Australian families and, importantly, victims of the banks could rest easily because finally something could be done, but no. Instead, now Labor, the Australian workers, families and victims have to go through another fight with this government. We have to fight for the recommendations of the banking royal commission to be legislated. I am shocked and outraged. I am disgusted that those opposite are putting their banking friends ahead of the Australian public.
The Morrison government have confirmed that they have no intention of legislating recommendations before the election. Let me tell LNP members how things work in the real world. If an ordinary worker decided to show up for only two weeks in four months, they would be sacked, so why do the LNP think that it's okay in this place to show up for two weeks in four months in 2019? Why does Prime Minister Morrison get to show up for only two weeks out of four months to do what he is paid by taxpayers to do—that is, govern? If a doctor received an important report that could prevent a disease from spreading, that doctor would be at work immediately. That very same day they would be reading the report and taking action to help their patients and to prevent the spread of the disease. Instead, we have an LNP government who don't want to hold their banking mates to account and who will not even put forward a piece of legislation to help out the victims of the banks. They would rather delay any action and delay any redress for the victims.
The royal commission's damning report revealed a culture of greed in Australia's banks that led to shocking mistreatment of customers. It revealed unconscionable, corrupt and potentially criminal behaviour in the banking and financial services sector. As Commissioner Hayne said in his final report, 'The financial services industry is too important to the economy of the nation to allow what has happened in the past to continue or to happen again.' But the Morrison government is allowing this to continue and the potential victim list to grow by refusing to put forward legislation that supports all recommendations in the banking royal commission report. The Morrison government has failed to accept the recommendations of the royal commission, using weasel words to back out of at least 14 recommendations. I know that the longer this government takes to act on the findings, the longer the list of the findings they will back away from will get.
Not only is the government not accepting the entire findings of the commission's report; the Morrison government is even voting in favour of banks regarding Labor's amendments to protect Australians. Just recently LNP members voted against Labor's amendments that would have seen greater penalties and longer jail sentences for dodgy bank executives. Even when Labor is trying to help victims, those opposite work for the banks and not for the Australian people. My message to the Prime Minister and LNP members is really quite simple: if you can't even be bothered to show up for work and to act in the best interests of the Australian people, then call an election—and call it now—and allow the Labor Party, a party for the people, to govern this great country. (Time expired)
As somebody who spent a long time in the banking and financial services sector before coming into this place, I have to say that the revelations of the royal commission are very disappointing and disheartening. To see that the profession of banking has stooped to levels that it has is, indeed, a disappointment. I hope that, out of this royal commission, the banking industry takes a good, hard look at the decisions it's made and the things it has done to ensure that what we've seen illuminated through the royal commission process is not repeated.
As I reflect on the many former colleagues who are no longer in the banking industry and the discussions that I've had with some of them, we all agree on one thing: the notion of banking built on relationships with customers that we started with in the banks in the early eighties is today, to all intents and purposes, dead. We see instead a banking sector that, sadly, is no longer run by professional bankers who have an interest in their customers' welfare and the longevity of those relationships. We see a banking industry populated by managers with professional degrees and educational experience who have never, ever worked on the shop floor in the branch. The days of a branch manager being able to meet with their clients, discuss their needs and come up with an appropriate solution for their circumstances and work with them through difficult times doesn't appear to exist anymore. That's an enormous indictment on the banking industry today, and I think that has been well and truly shown in the report from the royal commission and the evidence that was provided to the royal commission through nearly 10,000 submissions.
But, as has been touched on by a number of my colleagues in their previous contributions, it's important to reflect on what this government has been doing to ensure that the things that are occurring in the banking sector, which we know are impacting on outcomes for consumers, are being addressed sooner rather than later. It's important to note that even the Law Council of Australia came out the other day and made the very important point that we have to go through a process of ensuring that the legislation we need in order to implement the recommendations is properly considered and properly done. Things are being done and have been done. We've created, I think importantly, AFCA, the one-stop shop for financial complaints. The member for Herbert in her contribution touched on those who have unresolved issues with the banks. We've made it clear that we've given AFCA the ability to go back 10 years—the time frame that the royal commission went back through—to consider claims by those who believe they have been wronged by the banks and to have their cases heard. I think that's critically important. The other important thing is that AFCA now has the ability to make binding decisions on the parties involved.
We have also seen the removal of excess credit card charges, simplified calculation of credit interest and, importantly, I think, the ban on unsolicited offers on credit card increases. There a range of other issues which I think are incredibly important, given the context I painted before about the banking industry being populated by managers and professionals, not bankers, including the Banking Executive Accountability Regime. The regime seeks to ensure that we hold the executives of the banks accountable for the decisions they make. Far too often we have seen executives and senior officers of companies that have done the wrong thing escape sanction or punishment.
We also know that the royal commissioner has made recommendations to ASIC on a range of matters, and I think it's incredibly important that we see those go through to fruition. It is important, too, to ensure that we have the proper standards in the financial advice sector. So we are taking action, and we will continue to do so. (Time expired)
This afternoon I'd like to tell the House a tale of two royal commissions. Both of these royal commissions illustrate woeful behaviour with respect to the government and how they respond to pleas and situations from the community that they were elected to govern.
Some years back, the government launched the multimillion dollar witch-hunt that was the trade union royal commission. They salivated at the prospect of casting a bad light on the character of the Leader of the Opposition and a former Prime Minister, which they could not do because there was not a case to be had. They jumped up and down with glee at the prospect of dragging the wonderful trade union movement through the mud, wrecking the reputation of tens of thousands of wonderful men and women who work tirelessly for the benefit of their union members, for justice and for a fair go. Again it amounted to virtually nothing, other than the commissioner being asked to recuse himself because of his links to the Liberal Party. I'm proud to say that since then the trade union movement has grown from strength to strength. The coalition don't care about a fair go. They don't like organisations that fight for pay rises for low-paid workers, for safety regulations on work sites, for decent superannuation, for paid domestic violence leave or parental leave and for penalty rates, and against exploitation of workers, wage theft, casualisation and insecure work, because they only care about bigger profits for their big business mates and protecting their bad, unethical, hurtful practices.
That brings me to the second royal commission I'd like to talk about today, the banking royal commission. This time there was no salivating. There was no jumping up at the prospect of the outcomes. There was knuckle biting and there was gnashing of teeth. This time they had to be dragged there kicking and screaming because this time it was their mates in the firing line, the big banks. They voted dozens of times against it. Notwithstanding some of the heartfelt comments made today by a couple of members opposite, there's no denying that they had to be dragged here kicking and screaming. They didn't listen to the desperate pleas of the people in whose interests they were elected to govern and who were victims of the unethical behaviour of the banks. This time it was only done when their friends pretty much dictated to them the terms of the royal commission. It was the banks themselves that forced them here.
Australians will not forget this. We on this side supported the banking royal commission. We demanded it. We wanted it to happen because we knew it wasn't a witch-hunt or a ramped-up political stunt. This was necessary. Everyday people were fed up with the greed, excesses and arrogance of the big banks and were hurting from the mistreatment, unethical practices and, as we now know, potentially downright criminal actions of the banks. Australians had had enough.
We've known for a long time about the excesses of the banks. Calls for a royal commission into the culture of banking are not new. As far back as 1935, in the wake of the devastating Depression, a royal commission was called by then Prime Minister Lyons. One modest member of the commission was JB Chifley, a great Labor man, who entered a six-page dissenting report scathing of the banks. He concluded that they could not be trusted and that only nationalising the banks would cure them of all ills. There's no call for that today, and I'm not suggesting that occur, but it is very sad that it seems very little has happened since 1935 to rein in the banks.
We have a scathing report today, however, by the commissioner—a damning indictment on the behaviour of the banks and a litany of devastating stories of people's lives being badly affected to the point of destruction. The government responds with a promise to take action. Take action? What sort of action? Will it be positive action or negative action? Will it fix it or make it worse? We know that they will scale back or reject at least a dozen of the royal commission recommendations. We know they cannot be trusted to respond fully to this report and this commission.
You compare that with their response to the trade union royal commission where barely nothing of substance eventuated, where the Director of Public Prosecutions was embarrassed into withdrawing charges that had no substance against good people, like John Lomax, who had their reputations completely sullied when all charges had to be withdrawn because the case fell apart. You compare that with the banking royal commission. This wasn't a sham like the trade union royal commission; this was real. Real stories, real tragedies, real people and real need for change. Labor will act on the royal commission. We will make sure we legislate change and we will make sure we make a difference for everyday people's lives.
The first thing I'd like to say is that when I didn't support a banking royal commission I got it wrong. There is no doubt about that. I believed that the structure we had was able to deal with some of the issues that were brought up, so I freely admit that. I also must admit that the Labor Party claiming responsibility for something that was actually started by Senator John 'Wacka' Williams, Llew O'Brien and Barry O'Sullivan is too cute by half. If you want to celebrate being second coming to the cause of the banking royal commission, go right ahead but don't run us a yarn that you were first.
The reason I have better knowledge than most of the banks is I have worked for one for five years and I'm an accountant. I remember one substantial client of the banks whose interest rates were at 40 per cent. I thought this was completely outrageous.
There is a reason why we have to have some sense of temperance in this. We have to make the appropriate changes but we can't ride roughshod over every broker. I think brokers have played a substantial role in spreading the customer base away from the four major banks and into minor banks. If we lose sight of that, we are actually going to reduce competition. I believe that might have been one of the reasons where, after the banking royal commission was brought down, the more observant realised that the price of the major banks should go up, because they could see a reduction in competition. That's certainly something we didn't want and we certainly did see a rise in share prices of the major banks after the royal commission came down.
Another issue that I find perplexing about the latest position is that they talk about the egregious and overarching position of the major banks. Sure, you are entitled to that opinion but in the next breath you vote against limited divestiture powers for the major power companies. Why do you do that? Why do you believe market strength in one area is an evil thing and then market strength in another area is apparently a moral good? Why do you vote against limited divesture powers in trying to look after people in that other crucial part of their life which is power prices? Might I suggest that there is an unnatural link, a close association between big unions and big business, because that's where the majority of union fees come from.
When we take decisive action to properly put the sword of Damocles to affect behaviour, the Labor Party votes against it. Without a shadow of a doubt, being completely honest, if you want something that really surpasses all others in getting people's attention when the government speaks to them about changing their behaviour, then it's a divestiture power, as we see with the Clayton act and the Sherman Act in the United States of America, with the Enterprise Act in the UK and with the consumer act in Canada—all general divestiture powers. But somehow we believe that the Australian economy is so substantially different to everywhere else in the Western world that we don't need them. So, even when we vote for a minor one, you vote against it.
The member for Hotham on Patricia Karvelas's drive program said that the Labor Party's position is in-principle support. What does that mean? In principle, I don't believe I should break into a house. In principle, I don't believe that you should steal someone's lunch. There are a lot of things in principle, but you still haven't arrived at a decisive position. You are hiding yourself in these weasel words. People are going to call you out for it. They will call you out, because it shows that you are trying to ride on both sides of the fence and that can be an incredibly uncomfortable experience.
If you believe, in principle, that people shouldn't be ripped off, then how can you be so decisive about coming into their superannuation and taking their franking credits? I can tell you, that is biting out there; people do not like it. And if you in principle believe in all the recommendations of the banking royal commission, then why don't you in fact believe them? And might I say, you should temper your views, because if you go into this without further thought, you'll hurt others. Whilst you're at it, if you in principle believe in all the recommendations of the banking royal commission, then why don't you in fact remember that taking away negative gearing will reduce that other vital component of what people want: equity in their house?
A 'populist whinge', a 'reckless distraction', a 'QC complaints desk'—these are the words of the Prime Minister, who, as Treasurer under Malcolm Turnbull, arrogantly rejected Labor's call for a royal commission into the banks. What we also now know, thanks to the leaks pouring enthusiastically from the cabinet, is that the now Prime Minister was the last man standing in the Turnbull cabinet, desperately holding out against a royal commission when those around him had realised that the jig was up. It was not until the banks themselves begged the government to establish a royal commission, because they'd rather one be set up by those opposite than risk the terms of reference being set up by a potential Labor government, that one was finally established. This was a royal commission that this Prime Minister voted 26 times to avoid. Every Australian knows that this is a royal commission that this Prime Minister moved heaven and earth to stop, and he will stand condemned throughout history for it.
The royal commission received 10,323 submissions, many from people whose lives had been ruined. You can grin over there, but lives were ruined—suicides, breakdowns, houses and businesses lost, trust destroyed in institutions that once stood high in public regard. Some of the victims of the malfeasance by banks and financial institutions joined us in this chamber today. These are ordinary Australians whose only crime was to place their trust in people and institutions that did not deserve it. Despite the tight deadline imposed upon it, the royal commission exposed stories of avarice and wanton disregard for the law, and those opposite wanted to give it all a free pass. Those opposite voted 26 times not to hear these stories, not to expose these disgraceful examples of crime and greed.
Many Tasmanians are familiar with the story of Michael and Dimity Hirst, farmers from my electorate, who lost everything eight years ago when ANZ left them destitute. Michael fought to keep his emotions in check when giving his testimony, while Dimity cried in the gallery. Like most Australians, they did not have the resources to fight the banks. The royal commission gave them the chance to tell their story in a forum that mattered. They've received apologies now, but it's all too late. No apology, no compensation makes up for the loss and the emotional trauma. What will help heal the wounds is to implement the recommendations of the royal commission—not in part, not at some time in the future, not with some mealy-mouthed excuses about why is not the right time. If this government can start and finish legislation to deal with strawberries in one day, then surely, if it is serious about implementing these recommendations, it would be drafting legislation today and agreeing to Labor's requests for more sitting days to get this done—not after the election but now, within weeks, not months.
But this is a part-time Prime Minister, a man so desperate to cling to power and avoid losing a vote on the floor of this parliament that this place is sitting 10 days in five months. Imagine the howls of outrage from those opposite if any blue-collar worker tried that on: 'Sorry, boss; can I do 10 days in five months? That's fair enough, isn't it?' How quickly do you think they would be shown the door? Let's be clear. If this parliament sat its normal hours, the recommendations could be incorporated in legislation and it could be dealt with before the election. This is what Australians want and expect. Australians want real action, not loud and empty words from a Prime Minister who voted 26 times to avoid a banking royal commission.
On this side, we know this Prime Minister and those opposite are dragging their heels on taking action because they are the best friends the banks ever had. They've consistently voted against Labor's attempts to clean up the banking and financial services sectors. They've always put the interests of bankers ahead of consumers. The government recently voted against Labor's amendments for greater penalties and longer jail time for dodgy bank executives. On this side, we haven't forgotten that before those opposite were dragged to this royal commission they wanted to give the big banks a $17 billion tax cut. It's time to put Australians first, the banks second.
I thank the member for Lyons for that contribution, but, unfortunately, it was a very partisan contribution—often what you get from Labor members opposite. I really fear for this country because, when I look around at many people opposite, all they engage in is partisan politics. Everything they speak about and everything they do is to win a political point. It is not about what is best for the people they represent; it is about how it helps them, how it helps the people that support them.
Government speakers have outlined what we've done since coming into government. It was rightly emphasised earlier by a government speaker that it was Liberal Party and National Party MPs and senators from Queensland who fought for the banking royal commission—fought for it tooth and nail. What did the Labor Party do in the six years of the Rudd-Gillard-Rudd government? Nothing. They weren't enthusiastic about a banking royal commission at all. This idea that somehow the government voted 26 times against it is a complete fallacy—absolute rubbish. As one of the members outlined earlier, it is the cabinet that recommends a royal commission be held, and the Governor-General takes it up. The fact is that we on this side of the House will proudly vote against the opposition when they are engaging in partisan politics and wanting to disrupt government business. They weren't so keen when the royal commission into trade union corruption was going on. Where were the speakers opposite then to implement it or to talk about the recommendations? They didn't want to know about it at all.
We will be implementing many, many recommendations, and we've already done a lot to better protect consumers from misconduct. We've also done a lot to ensure executives are held to account for misconduct. We've increased competition to give consumers real choice. We certainly have done a lot. We will make sure that we follow and adopt the recommendations that the commissioner has put forward. In fact, we've actually got the government's response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry released right here. But what do we have from the opposition? Absolutely nothing at this stage.
When I'm talking to constituents in my own electorate, I often talk to them about financial education. It might be students; it might be young people that have just married or bought their first home. I'll talk to them about superannuation—about understanding it and, if they're employees, making sure that, just like they check their wages are paid every week or fortnight or month, they also check their superannuation has been paid and that they check it every few months to see how it's growing and how it's being invested. I'll talk to them about understanding basic concepts like tax rates—that the first $18,200 that we earn in this country is tax-free. So the first $18,200 that I earn, that the Prime Minister earns and that the Leader of the Opposition earns is tax free. For those working in the gallery, the first $18,200 they earn is tax free. With the Labor Party's policy for around $200 billion in new taxes over 10 years, we see that the shadow Treasurer does not want to give $18,200 tax free to pensioners and to retirees. He wants to tax them at a rate of 30 per cent from day one. So it's all right for me to have $18,200 tax free, and it's all right for the people up there and you members opposite to have $18,200 tax free, but if you're a retiree and you receive your income from shares you can't have $18,200 tax free; you're going to be taxed at 30 per cent. And what does the shadow Treasurer say? 'They're quite entitled to vote against us.' Well, I'll be telling everyone in my electorate to make sure they do vote against them, and I'll be doing my very best in May to make sure that I hold my seat, because the risk of a Labor government to this country, with their partisan politics, is bad for everyone. Considering that, for the first time since John Howard, we'll be returning a surplus in May, we don't need a $200 billion tax grab from you, putting your hand deep into people's pockets.