Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Hansard source

It is a privilege to be able to speak on this condolence motion with respect to John Bannon. I knew John Bannon and I can well recall his ascendancy into politics in South Australia and ultimately becoming Premier. He was not only a good Premier, but he was a thoroughly decent man who, regrettably, will be remembered more so for the collapse of the State Bank of South Australia than for the many good deeds that he led South Australia through and, indeed, for the many good deeds he did for all Australians. Much has been said about John since his passing. Stories have been written in the media, words have been said in the parliament and at his funeral service. And, to some extent, through those words there has been some balance—and I believe some rightful justice—brought to the legacy that he left as a national leader.

John Bannon won government back for Labor in 1982, after a bad election in 1979 when Don Dunstan stepped down and then handed the reins to Des Corcoran. I want to come back to that a bit later. But I want to talk about another aspect of the 1993 state election disaster for Labor. It was indeed a landslide election against Labor, with Labor losing some 12 seats at the time and Labor's vote dropping to, I think on a two-party preferred basis, less than 40 per cent. Indeed, given that at the previous election in 1989, Labor only secured 22 out of 47 seats and was governing with the assistance of two independents, it was always going to be a tough call for Labor to win the 1993 election. I would suggest that the additional fact of having been in office for 11 years would have contributed to that; it was much the case that, after 11 years, the community was inevitably calling for a change of government. But putting that to one side, the State Bank disaster was itself a tragedy, not just for John Bannon and the state government at the time but also, I believe, for South Australia for many years to come; and indeed, perhaps even for the nation. I will explain why.

When John Bannon saw that the State Bank was in financial crisis, he took responsibility as Premier and as Treasurer. He said the buck stopped with him, and quite rightly not only took responsibility; he was prepared to stand down as Premier of South Australia.—that in itself showed the integrity of the man. But it went further than that: he then subsequently stepped down as the member for Ross Smith, the seat he had held since 1977. So the State Bank issue ended John Bannon's political career. He was only 50 years of age at the time, and certainly had a lot more that he could have contributed to the state, had he remained in politics. The next step was that, stepping down as leader, he handed over the leadership to Lynn Arnold, who was another thoroughly decent South Australian. He was a great orator, he was an honest parliamentarian, and he had outstanding political talent. Lynn accepted the leadership, in my view, knowing full well that he could not win the 1993 election, but in the hope that through his leadership he would contain the losses of the South Australian Labor Party. I suspect he knew that if he lost the 1993 election it could also spell the end of his political career.

The 1993 election was a disaster for Labor. It lost the election. It lost badly, and Lynn Arnold did step down as Premier, and ultimately resigned his seat in parliament as well. So the State Bank affair not only cost John Bannon his political leadership in South Australia but it also cost us Lynn Arnold, who in my view was an equally competent leader that never ever got the opportunity to serve out a term as Premier and to deliver what I think he could have delivered for South Australia. I knew Lynn very well, and so I can speak about him very much from my own knowledge of his personal characteristics. I know that Lynn would have also made a great South Australian premier, had he been given a better opportunity to lead the people of South Australia. Lynn indeed went on to serve this country and South Australia. He took up an international regional leadership role with World Vision straight afterwards, and then came back to South Australia and for years was chief executive at Anglicare SA where, again, he did a terrific job, particularly in the social justice area. Finally, he studied theology and now serves as a minister of religion with the Anglican Church. In fact, he participated in the funeral service for John Bannon at St Peter's Cathedral. And so Lynn did continue to serve South Australia, but in a different capacity.

But there is another aspect to the State Bank disaster about which little has been said. It not only cost South Australia two great statesmen, but it also changed public policy in South Australia—public policy changes that still resonate today and are still relevant. What we saw was that the State Bank disaster caused governments to get out of government-owned banking in this country. That in turn left the banking sector to the private banks. Since that happened, we have seen that private bank profits have skyrocketed. Indeed, the Commonwealth Bank, which was sold a few years later as well—in the late nineties or at some stage in the nineties—from memory was sold for around $8 billion. The bank makes about $8 billion or more now each year. In other words, the bank was sold for about a year's profit in today's terms. But there were other assets sold. The point I make about that is that the government banks, in my view, were the best form of regulation in the marketplace. They controlled the excessive greed of today's big banks. Right now, there is a bill before parliament that we are debating about credit card fees—most credit cards being owned by the banks—where people are being gouged. That was not happening when government banks were also in the marketplace, because they acted as the honest broker in the market. And yes, they had to compete with the private banks; they did not have a monopoly. But they acted as the honest broker. That has all been lost.

We also saw a whole range of other government utilities and assets being sold and privatised. It became a public policy trend. Those who pointed to governments being in the business of managing assets that were in themselves business assets argued that the governments had no place in the marketplace in managing those assets, and that governments were poor business managers. That argument has never been truly sustained. In South Australia, I know that when those who argued that governments were poor business managers were doing so, they were simultaneously eyeing off the very assets that they wanted the government to sell so that they could get their own hands on them. Assets like the electricity assets in South Australia, SA water, the Lotteries Commission, TAB, and so many others, were all sold off—all assets that were actually returning money to the government and to the people of South Australia. The same applied across the border in other states and at the national level.

So the State Bank collapse gave rise, momentum and argument to all those people who would argue that governments should be selling off business assets that they did not need to be in control of. The sale of those assets was, in my view, short-term gain for long-term pain. Today, state and federal governments are cash-strapped, and I believe that is partly because their previous revenue-raising streams have all been sold off. Imagine what the federal government's position would be today, if the billions of dollars that the Commonwealth Bank is making were going into Treasury instead. It would make a huge difference. But none of those assets are owned by governments any more, and so the very revenue streams that kept many of the state governments afloat in years gone by have now been lost. I believe that that is a contributing factor to the difficulties that state governments all find themselves in right now.

Whilst the State Bank stuck to its core business of housing lending, it actually did very well. It was only when the board members pushed the bank into risky commercial ventures that the bank got into difficulties. And that fallout continued—as we saw at the heart of the global financial crisis, when the Rudd government wanted to establish a building and construction bank. We heard the howls of another State Bank disaster coming loud and clear from coalition members opposite. The other point I want to make about the State Bank disaster is this: the State Bank was being overseen by a board of directors. On that board were people who had been appointed because of their so-called business expertise and experience. Those very people were, in my view, the ones that pushed the bank into the risky commercial ventures that ultimately got the bank into trouble. Yet those same board members seem to have slipped out of the limelight scot-free. In other words, we entrusted the management of the bank to a board; on the board there were people with the so-called commercial experience; and they were the ones who let us down. And yet nothing was ever said about them. John Bannon wore it all.

It is for those reasons that the John Bannon story is about more than just his contribution to South Australia—and perhaps to the nation—as a premier. His contribution, and what happened with the State Bank issue, had ramifications which extended right across the country and which still affect us today. I come back to John Bannon's own personal legacy. John was elected in 1977 for the seat of Ross Smith. It was a relatively safe seat in the inner northern suburbs—

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