Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I'm pleased to rise and to have the opportunity to speak on our—the House Standing Committee on Economics—ongoing inquiry into the banks.

One thing I'd like to comment on about the royal commission that's been called is that I have some concern that many members of the Labor Party have given false hope to many people who will try to appear before the royal commission—that they think they can get some compensation. The entire problem, or the vast amount of problems that we've seen in the banking sector, is simply that our legal system does not give the victim of banking malpractice a fair crack. That is the fundamental problem. Someone who is in a business circumstance and who has a dispute with their bank simply does not have true access to justice because of the high legal costs.

That's why the most important thing that the coalition is doing is establishing a tribunal that will level the playing field somewhat. That will give an opportunity to someone who feels or believes that their bank has engaged in unconscionable, or misleading or deceptive conduct, or has broken some contractual term of their arrangement, to take their dispute to a tribunal and to have that dispute heard without undue cost to them. That is what will solve the problem. I'm sure that, when the royal commission finally hands down their report, that will be one of the strong recommendations they'll make.

But, just getting back to some of the last bank inquiry hearings, one of the things I have great concern about is that the banks have engaged in a form of political correctness to try to shadow away many of the things they've been doing. I will go to a couple of examples. Firstly, it's the National Australia Bank and the testimony of their CEO, Mr Thorburn. I asked him a question:

… you put out a press release in 2015 saying that you weren't going to loan any funds to the Carmichael coalmine. At that time, had you been approached for any loans for that project?

Mr Thorburn: I don't think so …

I continued:

… but you put out a press release saying that you wouldn't loan them the funds.

What we had there was the situation where one of the large banks put out a press release that they were not lending money to a certain project when they'd never even been approached. Now, that has to do commercial damage to that project. This is a foreign investor that comes into our country, that has already spent billions of dollars and that is already employing hundreds of Australians in real jobs, and we have one of the big banks issuing a press release saying they are not going to lend to them, which damages their commercial reputation, yet without that investor even approaching that bank. I don't think that conduct is good enough and I don't think it's responsible, given the significant reliance that our nation has on foreign investment. That was the National Australia Bank.

And they continued. Before Christmas, they put out what I can only describe as an 'ecopopulist voodoo statement', where they said they would no longer finance any new thermal coal mining projects. Surely, it's the banks' responsibility to weigh up the commercial viability of someone who approaches them for a loan and to make a decision on that basis? The banks should not be making a decision on what is politically correct at a certain period in time. The banks may well argue, 'There's no extra demand for thermal coal.' But, last year, we saw thermal coal prices up by over one-third. We saw our exports of thermal coal to Japan jump 50 per cent. We saw China's consumption of coal up 5.2 per cent. We've seen the International Energy Agency forecast that the demand for coal will increase between 2016 and 2022 by 300 million tonnes. We only export 200 million tonnes of thermal coal from Australia, and the International Energy Agency says that demand will increase by 300 million tonnes.

Industry experts are talking about the prospects for thermal coal. MineLife's Gavin Wendt said:

There is a very healthy price outlook for thermal coal.

The New Hope Group chief executive said:

We're seeing strong demand for higher quality Australian thermal coal in Asia, and that is what's driving the price.

It goes on and on. There is simply no reason, other than trying to appease a politically correct attitude in this nation, that the National Bank would put out such a statement. This shows, above all, why it is a very good thing to have a royal commission in this nation

And it didn't stop there. In the press release the National Bank put out they went on to say:

An orderly approach to the low carbon transition is critical to ensure Australians can continue to have access to secure, reliable and affordable energy and support our economy.

Hang on—'to continue to have access to affordable energy'? Do any of these bank executives actually open their electricity bills? Do any of these bank executives live in South Australia, where they have the highest electricity prices not only in the nation but in the entire world? They put out a press release saying, 'Continue to have access to affordable energy.' This shows that the executives of the National Bank are clearly out of touch with what is happening in the Australian economy. It shows that they are clearly out of touch with the economic needs of our nation going forward. To put out such a statement defies belief and shows why the decision for a royal commission should be supported.

But it didn't finish there. We also had the same thing from the other banks. We had the ANZ make the decision to put out a press release saying that they wouldn't finance a thermal coal station if it had an emissions intensity of over 800 grams per kilowatt hour. How can a bank make such a decision? Surely it has to weigh it up against the economics and the investment parameters rather than setting these artificial limits? It's the same thing with the Commonwealth Bank. The Commonwealth also put out a statement saying that they, 'wouldn't be loaning any funds and wouldn't consider a loan to the Carmichael coalmine in Queensland'. But, yet again, they had no responses asking them for a loan. How can we have our banks trying to mirror some of this anticoal rhetoric that we see in our community? They're just trying to cover up some of their misdeeds and to create a good feeling about some of their policies.

Our inquiries into the banking sector will continue with a House committee. There are still many issues we need to resolve, but, most importantly, we need to get the tribunal right. We need to ensure that if someone has a dispute with their bank they can take that dispute to a competent tribunal without the risk of being run over by legal costs and time, because that is the current system that we have. When a bank has had a dispute with someone and the person has said, 'I'll take you to the Supreme Court,' the bank would just laugh at them. It is that mismatch of power in our legal system that has caused the problems in our banking sector. I hope that with the policies of this government on our tribunal, and with the input of the royal commission, that this is something we can address so Australian entrepreneurs can go out there, risk their capital and try new business ideas, knowing that if something goes wrong with their bank they have the right to a fair hearing in a dispute.

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