The Banking Royal Commission has uncovered some almost inconceivably disgusting practices by the big four banks (NAB, ANZ, CommBank, Westpac) and AMP. If some of these had not been uncovered by the Royal Commission, it is extremely unlikely that anyone but the victims would have believed them possible. Charging dead people for financial planning advice is something that could only be conceived of in the most absurd comedy.1
In 2014, a Senate committee recommended a Royal Commission into the Commonwealth Bank financial planning scandal. This scandal involved planners being accused of putting client’s money into risky investments so they could earn hefty commissions along the way. In early 2016, Four Corners and Fairfax found that the insurance arm of the same bank rejected claims from sick and dying policy holders. In addition, ANZ and Westpac were dragged to court by the corporate regulator Australian Securities and Investments Commission (ASIC) for rigging inter-bank interest rates2.
The Labor Party announced in early 2016 that if it won office in the 2016 election, it would hold a Royal Commission into the banking and financial services industry3. However, it didn’t win the election and the Coalition had been very much against the concept. For instance, as you would expect, Scott Morrison hammered Bill Shorten and the Union movement in stating: For Bill Shorten to go down this path, I think it is a reckless distraction that puts at risk confidence in the banking system, and dismissed it as playing “complete politics” prior to the election3. Morrison also stressed that the banking industry was well regulated in saying “We have a tough cop on the beat in that area – it is called ASIC. We have a strong regulator – it is called APRA. We have the Reserve Bank which provides a broader framework in which the banks operate in (sic). Our banking system is well regulated”2.
Just before the 2016 federal election, Prime Minister Malcolm Turnbull wrote to Opposition Leader Bill Shorten asking him to drop his calls for a Royal Commission, instead announcing the laughable prospect of the CEOs of the big banks being brought before a parliamentary committee once a year to explain their decisions. This idiotic idea was rightly pilloried. Turnbull stated that a Royal Commission would only “delay action and postpone reform”4.
The out of her depth Minister for Revenue and Financial Services, Kelly O’Dwyer, claimed that a Royal Commission would simply “go over old ground and would delay well developed and important reforms” and that it would “send the signal internationally that the government believes there are structural problems with our banking and financial system and could lead to significant repercussions for confidence, international investment and our AAA credit rating”5.
Now that the Royal Commission has uncovered these disgraceful practices, all of the government members mentioned above have jumped on the bandwagon, seemingly now believing that it was a necessity. O’Dwyer now believes the government did ‘the right thing in giving the Royal Commission broad terms of reference’ (i.e. including financial services in addition to banks)6, despite having attempted to hamstring it by giving it only a year to run. Morrison also claimed that the revelations from the Royal Commission had validated the government’s decision to expand it beyond that originally envisaged by the Federal Opposition7. This is much like the travesty that was the same-sex marriage vote. That was simply a delaying tactic by the RWNJs running the Coalition, but when the Yes vote clearly won, Turnbull tried to claim it as a victory. Given time, you can be sure that the Coalition will claim this Royal Commission as a victory for them and ‘for all Australians’ conveniently forgetting that refused to call one for a couple of years.
There is one thing which the Australian people deserve, in addition to some sort of restitution from the banks and AMP for their disgraceful transgressions, and that is an apology from the government for their many months of stonewalling8. Pigs might fly.
If some kid shoplifts a few times there is a fair chance he will get a custodial sentence, but does anyone really think that any of these highly-paid executives in the banks or AMP, who have been charging deceased estates for financial advice, or charging people for services not provided, will get custodial sentences? One rule for them and another for the rest of us; after all, they donate hundreds of thousands of dollars to the Liberal Party.