A month out from the second round of public hearings that form part of the government’s ‘Review of the Four Major Banks' and the manager of opposition business, Tony Burke MP, has argued that public opinion is turning in favour of a banking royal commission.
Now mandated to be held every year, parliamentary scrutiny into the conduct of Australia’s major banks (by the House of Representatives Standing Committee on Economics) is only one thrust in a pincer movement that in 2017 is already tightening around bank conduct.
Burke told AB+ F that the bottom line is ensuring banks are held accountable and the Australians they impact are guaranteed recourse.
“What matters here is that the victims of banking can get a process where they get justice and the system gets fixed,” Burke said. “Only a Royal Commission can do that.”
In the lead up to the next round of public hearings on Australia’s banking and financial system, momentum has been building against allowing banks further wriggle room.
In August last year, Burke was a single vote from forcing the government to defend a royal commission into the country’s major banks when Queensland MP George Christensen flipped his vote (after declaring support for a royal commission in various public forums), which meant the government blocked debate on the issue by 75 votes to 74.
Last week Christensen signaled another reversal, with the federal MP for Dawson tweeting: “I've spoken with @realbobkatter (Independent MP Bob Katter) re banks. He is going to introduce bill to set up Commission of Inquiry into banks. It will have my support.”
With respected figures like the government-appointed Ombudsman Kate Carnell airing her frustration with the banks’ intractability, Burke told AB+F he would not bother depending on the word of Christensen for reciprocity.
“I appreciate any Government member who is willing to acknowledge that Malcolm Turnbull has not done enough, but I have to note; the last two times this issue came up in the Parliament, no matter what George Christensen said in advance, he always ended up voting with the Government and banks when it came to the crunch,” Burke said.
Distinct legal disadvantage
Only last week, the inquiry into small business loans by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, exposed the big four banks as “consistently” engaging in practices that significantly harm some small business customers.
The three-month ASBFEO investigation led Carnell to conclude loan contract arrangements between banks and small businesses leave the borrower pinned by a distinct legal disadvantage.
“Fundamentally, what we've found is that small businesses who take out a loan, do so under the impression that if they keep up their payments, they will stay out of trouble," Carnell told AB+F last week. “The reality is that this is not the case.”
Former chief investigator with the Centre for International Finance and Regulation (CIFR), Dr Rob Nicholls, said that while he was satisfied with the conclusions drawn from the first round of hearings last year, the show was "meaningless" without concrete follow up that ensured actions matched words.
“Yes, the government provided a bit of political theatre as promised, but between the spaces I feel the parliamentary report summarized nicely – I don’t want to say 'concessions' – so, the 'issues' the banks made promises on,” Nicholls said.
“Now we need to see the action. They must be held to account in respect to the promises made."