Stakes high as bank CEOs face Senate

  • By Andrew Starke

Australia’s major banks, Macquarie and the Australian Bankers' Association will on Friday put their objections to the government’s proposed bank tax to a Senate inquiry with the mood in Canberra seemingly moving against them.

While the senior bank executives to be questioned by Senators have had plenty of practice with politicians recently after fronting the House of Representatives Standing Committee on Economics twice in the past six months, the stakes have arguably never been higher.

Aside from the $6.2 billion bank tax, which is almost certain to be passed into law by the Senate next week so the tax can begin on 1 July, the spectres of either a royal commission or a parliamentary commission of inquiry into the banks cannot be discounted.

On Thursday morning the Senate, driven by Labor, the Greens and the crossbench, voted in favour of a commission of inquiry into Australia's big banks and financial sector but the Greens’ private member’s bill narrowly missed being debated and voted on in the lower house in the afternoon after a Labor push.

The passage of the bill through the upper house makes it just the second time the Senate has voted to establish a commission of inquiry - an alternative to a royal commission, which has been repeatedly blocked by the House of Representatives.

Specifically, the Greens' inquiry would examine executive pay, "vertically integrated" business models and penalties for misconduct.

“The Greens were the first party to broaden calls for a Royal Commission to the other banks, and the only party to put forward a full Terms of Reference into what the Royal Commission should examine,” said a Greens spokesperson.

“This needs to include the role of political donations, CEO and executive pay structures, separating retail banking from financial advice and penalties for white collar crime.”