Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I move:

That the Senate:

(a) notes that:

  (i) trust in banks is essential to the economy,

  (ii) trust in the banks has been undermined by adverse findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry,

  (iii) misconduct related to poor standards of mortgage lending affects all Australians and risks financial instability,

  (iv) concentration on mortgage lending makes the economy vulnerable to a downturn in the housing market,

  (v) reliance on overseas debt markets for short-term borrowing by the major banks, and contagion from overseas counterparties through trillions of dollars of derivatives related to mortgages, pose serious systemic risk,

  (vi) misconduct related to financial advice, small business lending, superannuation and insurance shows that the business model of major banks is based on exploitation rather than customer service,

  (vii) the integrated structure of banks facilitates misconduct due to the lack of transparency when traditional commercial banking is linked with investment banking, financial advice, wealth management, stockbroking, superannuation and insurance businesses,

  (viii) the integrated structure creates a conflict of interests because the lack of transparency enables banks to extract profits through cross-subsidies of various activities, and the indirect cost to retail superannuation members runs to many billions per year,

  (ix) the enormous profits extracted through the integrated structure entrenches the major banks as an effective cartel, preventing market competition and increasing concentration, and

  (x) the integrated structure puts bank deposits at risk as collateral for major banks' speculation in mortgage-backed securities and derivatives – this puts the real productive economy at unnecessary risk; and

(b) calls on the Federal Government to reduce the conflicts of interests by legislating the structural separation of the banking system, where traditional commercial banking of taking deposits and making loans is separated from investment banking and all other financial services, including financial advice, wealth management, superannuation, stockbroking and insurance.

Anne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I seek leave to make a short statement.

Scott Ryan (President) Share this | Link to this | Hansard source

Leave is granted for one minute.

Anne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | Link to this | Hansard source

The government opposes this motion. In order to have a stronger economy, it is integral to have a financial system that is efficient, stable and trustworthy. The government will await the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Anthony Chisholm (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to make a short statement.

Scott Ryan (President) Share this | Link to this | Hansard source

Leave is granted for one minute.

Anthony Chisholm (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Labor fought for a royal commission. Labor has called for the royal commission to hear from more victims. Labor is doing everything it can to hear from those through roundtables around the country. But we can't rush into significant reforms like those proposed in this motion before the royal commission has delivered its final report. Labor will look with interest in the final report in February 2019 for recommendations to address the shocking findings outlined in the interim report.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

I seek leave to make a short statement.

Scott Ryan (President) Share this | Link to this | Hansard source

Leave is granted for one minute.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

The Greens support breaking up the banks because we recognise there is a fundamental conflict of interest at the heart of the banking sector. We've been leading reform in this space. We led the campaign for a royal commission, and we're now leading the campaign to reform the banks. We said it was important to do that back in 2017. Since then, the Productivity Commission has said it too, ASIC has said it too and the royal commission is clearly saying it as well. ASIC says financial advisers to big banks recommend their own products instead of what's best for consumers 75 per cent of the time. If that's not a conflict of interest, I don't know what it is.

It's not enough to just say that we need to break up the banks and let banks focus on being banks. The ACCC needs to be put back in charge. We need a regulator with teeth. We need some real competition in the banking sector, which is why we've advocated for a national low-cost people's bank to restore competition to the mortgage market. Breaking up the banks is a good start, but it's just a start. Only the Greens have a plan to address this issue.