Stephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 is a breach of faith with the Australian people. It's a broken promise. It's said to be about the flow of credit in the Australian economy. It's not. It's a policy orphan. It's a problem in search of a solution. I could talk about the promises that this government has made and broken—indeed, I will come to that in a moment—but I want to start by talking about what this bill is really about. It's about the needs and interests of ordinary Australians and how the government's plan to revoke a law runs against the interests of those ordinary Australians.

Almost every Australian is a bank customer. For the most part, it's a pretty good relationship, but when things go wrong, the effects can be devastating and life-altering for the customers. It's important to note here that as customers our relationships with the bank are not equal. Banks hold most of the cards. They have armies of lawyers, legions of financial wizards and well-oiled publicity machines. The ordinary customer, on the other hand, has just one thing on which they can rely, and that is the law. The laws that we pass here protect customers. They go some way to levelling out that relationship between the bank on one hand and its customers on the other. They help customers take that leap of faith when they put their trust in that bank to look after their interests. They increase the odds of getting justice when a predatory bank or a rogue staff member within that bank takes everything a customer has—their house, their life savings and, very often, family relationships when things go wrong. This is not theoretical. There were 10,000 submissions to the Hayne royal commission. That's 10,000 individual financial tragedies; 10,000 ordinary people, from small-business owners to pensioners, who put their trust in a bank and were poorer for it.

But to really highlight the personal cost of weak banking laws, I want to tell the story of a case that wasn't represented amongst those 10,000 submissions. This was a saga that cost the man at the centre of it everything. It began with a very simple act, an act that thousands of Australians perform on a daily basis, and that act was to walk through the door of a local bank branch and ask for a loan. The year was 1985, and the man was a fifth-generation farmer who needed a modest float to tide his farming business over. He walked into the Commonwealth Bank. The branch was in Inverell, and he was looking for a $200,000 loan. What he ended up with was a loan of $675,000, denominated in Swiss francs.

Over the coming weeks, the Australian dollar dramatically devalued against the franc. The farmer who started out with $675,000 in debt, suddenly had a debt of A$1.5 million. The impact was immediate and devastating. It cost him his farm. It cost his family their farm in South Australia, which had been in his family for five generations. It cost him his marriage, and for a time he lived in a caravan. In winter he stopped using the heating because he couldn't afford the bill. I don't know if you've been in Inverell in the middle of winter, Madam Deputy Speaker Wicks. I have. It's known to snow. It's damn cold.

That farmer's name is John Williams. Around this place he's better known as Wacka. He was the victim of a hyperaggressive sales culture that was then in place at the Commonwealth Bank. He was never told that the salesman who sold him his Swiss-franc-denominated loan was getting a whopping commission for the sale. He was never warned of the dangers inherent in a foreign-currency-denominated scheme. In fact, the bank representative convinced him to borrow more than he was actually looking for, suggesting he invest in property with the extra money. He was never told of the risks. He was never told the representative who sold him the loan was paid a huge commission. He was lied to when he asked about hedging loans that could have helped manage the extreme risk that he'd been duped into taking. Despite the fact that the bank's own internal review showed that he was given wrong advice, it took him 15 years and a massive court battle to get justice.

John 'Wacka' Williams was not alone; 5,000 other farmers had been sold the same dodgy loan scheme. Divorce, the loss of family and the loss of businesses was the norm for such victims. Tragically, suicide was also common. These were the circumstances that led John Williams into politics, into the Senate in the federal parliament. Look, there are plenty of things that Wacka and I disagreed on, but his passion for seeking justice for bank victims was one that we were in 100 per cent agreement on. His 15-year legal battle against the Commonwealth Bank for personal justice was good practice for his career in this place. When Labor proposed a royal commission into the banking sector, we found not only a sympathetic ear but a principled politician willing to go against the coalition party room and bring the royal commission on.

The harrowing revelations the commission uncovered may have been a surprise to many of his government colleagues who voted against the royal commission on 26 separate occasions, but Wacka Williams knew something different. Having seen the lies, the cover-ups and the outright fraud of his bank and the perpetration of these crimes against others—the 5,000 other foreign loan scheme victims—he knew something had to be done. Just as the Liberal Party betrayed Wacka Williams and his ilk on 26 occasions by voting against the royal commission, it's now betraying those 10,000 people who came forward to the royal commission, and thousands more like them.

When all was said and done, after 68 days of hearings and almost two years, after 130 witnesses and story after harrowing story, Commissioner Hayne delivered 76 separate recommendations. The first of them, recommendation 1.1, was the recommendation from which all other recommendations flow. It was the cornerstone, if you will. That recommendation was: 'Keep the responsible lending laws as they are.' The hint is in the name: 'responsible lending laws'. They impose a very small obligation on a bank. They've only got to do two things: when you're offering a loan to a customer, ensure, firstly, that it is appropriate for their circumstances and, secondly, that they can afford it. Some might say that's simply good business practice, but there are 10,000 submissions to the royal commission that testify to the fact that good business practice was all too uncommon.

'Keep the responsible lending laws in place.' These are the very laws which this bill seeks to remove, the very laws that Commissioner Hayne described as 'critical' in evening the balance of power when a customer goes to see their bank for a loan, and the very laws that have protected this country's financial system from the instability that has been so much a characteristic of the banking systems in other countries around the world. This is a clear broken promise.

On the day the royal commission's final report was handed down, the Treasurer promised to implement the recommendations. To this point, after two years of faffing about, of delay and excuse, the government has implemented only one-third of them—one-third. What else would you expect from a government that tried on 26 separate occasions to avoid the inevitable? What else would you expect from the Liberal Party, whose member snuggles up on a daily basis to the banks and their ilk as if to a hot water bottle on a cold winter's night while customers freeze on the porch?

Wacka Williams was not alone within the Nationals' party room in calling for a banking royal commission. The member for Dawson famously told journalists up and down the gallery that he would cross the floor to get a commission up. Of course, that turned out to be fake news. He didn't have the guts to follow through on his promise. He made the right noises then, but he didn't follow through. He'll get another opportunity. Then the Deputy Prime Minister at the time, the member for New England, made similar noises but also had a failure of courage when it mattered. But at least later down the track he admitted that he was wrong. The list goes on. You've got Senator Canavan now saying that he was wrong to oppose the royal commission as well.

I say to the member for Dawson, the member for New England and Senator Canavan: now is your moment to shine. Now is the moment to correct the blight on your parliamentary voting record. You all have the opportunity to stand like true, independent Nationals and not be the lapdogs of the Liberals. Vote your conscience. Vote as John 'Wacka' Williams would have, and reject these laws. Otherwise, everything you've said until this point, all of the noises that you've have made over the last couple of fortnights about the Nationals needing to stand on their own two feet to show that they're independent from the Liberals, to show that they will stick to the spirit of those independent Nationals like John 'Wacka' Williams, will all amount to nothing. Senator Canavan says that he wants the Nationals to be more assertive. This is his opportunity to do exactly that.

The member for Hughes has recently resigned from the Liberal Party, saying that he needs to exercise a vote in favour of his conscience, not in favour of the Liberal Party, when he votes in this place. The member for Hughes is going to have an opportunity tomorrow to show that him moving to the crossbench is not all just fluff and wind; that he's truly going to be an Independent. He stood yesterday and said that he intended to stick to the promises that he made to the people of Hughes at the last election. Here's one of them. He promised to implement the recommendations of the royal commission. He promised to stick up for the victims of the banks' bad behaviour. He promised to ensure that the responsible lending laws would stay in place. Here's an opportunity for the member for Hughes to show he really is an Independent.

It's an opportunity for the member for Dawson and the member for New England to show that they are not just froth and bubble and that they are not just lapdogs to the Liberals, who never wanted a royal commission and have done everything within their power to act against its implementation. They get an opportunity tomorrow. Are they going to stand with Scott Morrison, the Prime Minister, or are they going to stand for the interests of the people in their electorate? Are they going to be true Independents or true Nationals? Are they going to keep the spirit of John 'Wacka' Williams alive or are they going to be poodles to the Prime Minister and the Liberal Party? This is their opportunity to do the right thing. It's an opportunity to help the people who put them here.

Recommendation 1.1 was unique amongst the 76 recommendations in that all it asked the government to do was to leave things as they are. All they had to do was tick this one off and do nothing, a task that should be pretty easy for this Prime Minister. Instead, they've done nothing on 50 recommendations where action was called for and acted instead on the recommendation that said that all they had to do was leave things as they are. Just like they hung their old mate John 'Wacka' Williams out to dry by opposing the royal commission, they'll be throwing all those other victims under the bus as well if they do not vote with their conscience and reject these atrocious laws.

On the day the royal commission's final report was handed down the Treasurer took it in his hot little hand and ambled down the hall to the blue room in Parliament House. We had quite a performance. There were tears and all. He railed against the sales-driven greed culture of the banks. He earnestly promised that things would change. He was almost brought to tears in talking about the case of a young Down syndrome man who was sold insurance he never needed and couldn't afford. That man's father has called upon the Treasurer not to proceed with these laws, because he understands from his own experience what a failure to put in place strong consumer protections looks like. What was the Treasurer's response? He did not even have the courtesy to reply to that man's letter. He didn't even reply to the letter.

Those of good conscience in the coalition party room are going to have an opportunity tomorrow to do the right thing. We're calling on them to do exactly that. They've promised that things are going to change. They can be a part of that change. They can keep their promises and do the right thing or they can proceed and break the promises that they made to their constituents before the last election, and we will remind every single one of them of what they've done. I move the second reading amendment that has been circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"the House declines to give the bill a second reading and calls on the Government to:

(1)   respect the findings of Commissioner Hayne;

(2)   not weaken Australia's credit laws; and

(3)   pass legislation that will actually support Australia's economic recovery, rather than overturn recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry".

Lucy Wicks (Robertson, Liberal Party) Share this | Link to this | Hansard source

Is there a seconder for the amendment?

Matt Keogh (Burt, Australian Labor Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Debate interrupted.