Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Economics, I present the committee's report entitled Review of Australia's four major banks: First report of the 48th Parliament, together with the minutes of proceedings.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—Australia's major banks are central parts of our national economy.

They support Australian businesses to invest, innovate and grow, while also helping millions of Australians pursue their personal ambitions—whether that's buying a first home, keeping their finances secure or planning for long-term financial stability.

Because of that role, the decisions made by our largest banks matter.

When they get it right, households and the broader economy benefit.

But when decisions go wrong, the consequences can be serious, and they are often felt by customers and communities first.

That is why the House of Representatives Standing Committee on Economics has maintained its program of annual public hearings with the major banks in this new term of parliament.

These hearings ensure that we continue to fix a strong public spotlight on bank conduct, culture and governance.

In the aftermath of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, these hearings are one of the few remaining public forums that provide transparency and accountability for the decisions made by the nation's largest financial institutions.

A critical recommendation embedded in the heart of the final report of the royal commission was recommendation 5.6.

This recommendation requires all financial services entities to frequently assess their culture and governance, identify problems, address them, and determine whether changes made have been effective.

Commissioner Hayne made it clear that to ignore the recommendation would be 'foolish and ignorant because those who will not learn from history will repeat it.'

He continued:

Above all, it demands recognition that the primary responsibility for misconduct in the financial services industry lies with the entities concerned and with those who manage and control them: their boards and senior management.

Crucially, he also made clear that this responsibility is not a one-off exercise—and our committee takes this point very seriously.

Banks must apply, reapply and keep reapplying the lessons of the royal commission over time.

That principle of continuous reflection and improvement underpins the committee's work today.

Nearly a decade on from the royal commission, the evidence examined in this review shows why sustained scrutiny of the banking sector remains essential.

For example, the ANZ was recently subjected to the largest-ever fine, levied against a single entity by ASIC.

This follows misconduct linked to a major government bond deal and separate failings affecting tens of thousands of retail customers.

Nearly a decade later, considering the behaviour referenced above, we're reminded of Commissioner Hayne's words: 'foolish, and ignorant'.

ANZ's $250 million fine follows repeated regulatory interventions against the bank over the past decade.

These actions point to deep-seated governance and cultural issues.

While senior management assured the committee that improvements are being made, the committee will monitor this closely to ensure promises match experience, and we will seek further reporting from regulators to ensure those commitments translate into real change.

Evidence from the Commonwealth Bank raised different, but equally troubling, concerns.

In particular, the bank's treatment of low-income and concession customers highlighted the gap that can exist between technical compliance and community expectations of a 'fair go'.

Around 2.2 million low-income customers were wrongly placed in high-fee accounts and charged approximately $280 million in excessive fees by CommBank.

While remediation has begun, the bank has imposed tight eligibility rules and complex refund processes that make it unnecessarily harder for affected customers to recover what they are owed.

During the hearing, there was a suggestion that returning this money might be something shareholders object to.

Frankly, that should never be a consideration in circumstances where customers have been charged fees that should not have been paid.

The bank has profited from what's akin to an ill-gotten gain.

If the situation were reversed, there is absolutely little doubt that the bank would recover the money quickly.

The CBA is urged in the strongest terms to resolve this promptly—and fairly.

These examples reinforce a fundamental point: banks must be able to demonstrate that customer interests are genuinely embedded in decision-making at every single level.

Through the Review of Australia's four major banks, the House of Representatives Standing Committee on Economics examines not only bank conduct and governance but also the insights banks can offer into the financial wellbeing of households, the pressures facing businesses and the performance and resilience of the Australian economy more broadly.

The report reflects evidence received during the committee's hearings with the major banks held on 18 and 19 November 2025.

It considers how banks are responding to economic pressures, regulatory expectations and technological change, while remaining focused on customer outcomes and systemic stability.

Finally, I'd like to acknowledge the contributions to this review by committee members and the entire secretariat.

I also want to thank the deputy chair for the collaborative, thoughtful approach he employs in complex examinations such as this.

These combined efforts have been instrumental in ensuring that the committee is able to discharge its accountability role effectively and in the public interest.

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

by leave—I fully endorse the committee chair's comments. The governance and culture of the major banks need to be continually put under the microscope to ensure they're fulfilling their standards to customers and to suppliers and their social licence to the community abroad. I'd really like to thank the chair, for the bipartisan way in which he ran the committee, and the full secretariat. I think it was a very good report of a very good inquiry, and, hopefully, is the first of many to come.

I think ensuring competition is at the heart of our banking sector. It needs to be part of the relentless focus of this committee's work. The banks hold a privileged position in Australia's economy, and we need to ensure they discharge that privileged permission, putting Australians—and, particularly, Australian businesses and customers—first.

I think we also need to ensure there's appropriate competition in the sector, whether that's through new entrants in the payment space or through stable coins and other financial products. We need to ensure Australia stays at the forefront of innovation in the banking sector.

This inquiry examined the performance of the banking sector and the pressures Australia faces across housing, the cost of living, business conditions and financial access. It's important to acknowledge at the outset that Australia's banking system remains resilient. The major banks are stable; they continue to lend and are supporting households and businesses through a somewhat challenging economic period—even during this fuel crisis.

But the evidence also made clear that the system is operating under strain. Yes, we heard from the chair on the governance strains—that I fully endorse. We heard about the cultural strains. But a consistent theme also emerged across the inquiry: that regulatory settings are very focused on managing risk and not sufficiently focused on enabling growth.

Now, we heard clearly that this is not accidental. Following the global financial crisis, financial systems, appropriately, around the world, shifted towards regulatory regimes primarily focused on managing risk. Australia did the same. This contributed a lot to stability and is a big reason for how resilient and stable our banking system remains.

However, globally, this shift is now moving back towards an approach which balances growth against this risk. The United States has already moved in this direction. The regulators in the UK are now explicitly stating the need to move from managing risk towards balancing risk and growth. Australia as a country has not yet made that regulatory shift. This matters because access to finance is central to economic expansion. When settings are overly cautious, lending becomes constrained, investment slows and productivity suffers. We are seeing this play out in real time. Small business lending is subdued and has largely been flat for much of the last decade. There's a growing sense the system is calibrated towards avoiding risk and supporting expansion. This creates a drag on both growth and productivity at a time when the economy needs it the most. We need to get banks growing their small business books and growing them aggressively.

Australia is also facing a structural imbalance between demand and supply, not only in the overall aggregate demand of the economy but also in housing. Demand continues to be driven by strong population growth and policy settings while supply has not kept pace. This gap is placing sustained upward pressure not only on inflation and on interest rates but also on rents and house prices, making it harder for Australians, particularly first homebuyers, to enter the market. Policies such as low deposit schemes, including the five per cent deposit pathway, were raised as part of this discussion. While intended to support access, in supply constrained environments, they risk increasing purchasing power without increasing the number of homes available. That dynamic does not improve affordability. It drives prices higher, increases the size of mortgages, and the size of mortgages is correlated to the size of banking profits.

The long-term cost to the economy is significant. Analysis from Cotality shows that, for a median dwelling of $850,000, a buyer entering with a five per cent deposit would pay approximately $850,000 in interest over a 30 year loan. By comparison, a buyer with a 20 per cent deposit would pay $130,000 less in interest alone. These policies don't just affect access; they are locking Australia into higher debt burdens and they are fuelling banks' profits.

Migration was also a key factor raised throughout the inquiry, and there's broad recognition, including voiced by bank CEO Matt Comyn, that a more sustainable migration intake would help balance housing. Mr Comyn referenced the figure of 180,000 and the need to align population growth with housing supply, infrastructure and services. When that alignment is not achieved, the pressure shows up in higher housing costs, congestion and broader impacts on the cost of living. We also heard clearly from the banking sector about the importance of policy certainty, particularly in relation to energy and investment. We all want Australia to be a country of low energy prices and a strong economy. We heard from the CEO of ANZ, Nuno Matos, who warned that we can't let the medicine kill the patient in our approach to energy.

The inquiry also examined the payment system and broader financial infrastructure. Australia is undergoing rapid change in how payments are made and processed. There's clear innovation underway. However, the regulatory framework is struggling to keep pace. Costs remain a concern, competition is uneven and there are questions about whether innovation is being fully supported. I'd like to congratulate the chair on bringing on a payments inquiry that we look forward to reporting on soon.

In addition, issues such as debanking have emerged as a persistent barrier to competition and growth in the economy. Businesses and individuals are being excluded from financial services due to risk settings and compliance pressures. This has real economic consequences and it affects Australia's competitiveness. It limits participation, restricts growth and reduces confidence in the financial system at a time when access to finance is essential to economic activity.

Taken together, the evidence points to a broader conclusion: the banking system is operating within economic conditions that are placing increased strain on the economy, households and businesses. High demand without sufficient supply is driving up household pressures and business pressures. Inflation and interest rates are reducing household capacity and business capacity, and policy uncertainty has the effect of affecting investment decisions. Banks can respond to these economic conditions better. We must ensure they are acting in customers' and the national interests but we recognise that policy settings influence this as well.

This responsibility sits with government. If demand continues to outpace supply, affordability will not improve and neither will interest rates nor inflation. We need to avoid policy settings that create uncertainty, otherwise investment will not accelerate. If we continue to prioritise risk without appropriately enabling growth, the economy will continue to underperform—banks included—making Australians poorer. The central issue identified through this inquiry is now where we are looking for banks and regulators to address their focus. Again, I would like to thank the chair and the secretariat for a great bipartisan approach to this important issue.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.