Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

The member for Macarthur here is a former paediatrician. Imagine still being paid for the delivery of a child when they're 30 years old—it'd be a great lurk if you could do it—or, as a lawyer, giving out advice and then being paid 30 years later for the advice you gave on that day. One of the reforms Labor introduced as part of its Future of Financial Advice laws was the opt-in requirement. This requires ongoing financial advice clients to opt in to fee arrangements every two years. That simple opt-in requirement, which I believe could've been tougher, was opposed by the coalition even then. The member for Higgins, now Minister O'Dwyer, said at the time:

The opt-in provisions must be removed. There is no other marketplace in the world whereby an opt-in process is implemented.

ASIC, however, in their 2016 report praised this opt-in measure:

This reform significantly reduces the likelihood that customers will continue to pay fees for ongoing advice services if they do not wish to receive those services or pay those fees.

Whether in government or in opposition, the coalition have consistently fought against measures that would protect customers from misconduct in the banking industry. They fought against protections for customers in the face of numerous horrendous instances of banking misconduct—misconduct ignored by the Turnbull government even when the government's own regulator, ASIC, reported it to them. Just last year, two of the big banks, NAB and ANZ, both settled cases with ASIC for $50 million each. I think today I heard that CBA had also settled a similar case. Justice Jagot of the Federal Court was reported to have said:

… the conduct of the traders were a gross departure from basic standards of commercial decency, honesty and fairness, and that the Australian public had a right to be shocked, dismayed and disgusted at what took place …

This was not a judge talking about drug dealers; this was a judge talking about people that represent some of the strongest pillars of our economic society. The ASIC commissioner, Greg Medcraft, understands this is a shocking, systemic problem. He said earlier this year:

Stop saying it's a few bad apples. At some point you've got to look at the damn tree and say, what's wrong with us as an organisation?

From what we've seen so far in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, this tree has serious rot in the trunk. We have seen headlines in the past few days about directors resigning, despite continuing to deny any wrongdoing. I always love that. The royal commission has heard that AMP was forced to confess that it made almost 20 false or misleading statements to the corporate regulator regarding fees for no service that they applied to customers after their financial adviser retired. This was a conscious policy taken by the company to charge customers fees for 90 days after they no longer were receiving any service. It's shocking that this would occur at all, but it is more shocking that it was a policy of the company and known by those with authority within the company.

AMP is not alone in this misconduct. The Commonwealth Bank's financial advisers had been charging dead clients for financial advice—no complaints from those customers, obviously!

In one case, the adviser knew that the client had died in 2004 and continued to charge service fees for a decade after the client's death. Again, this was not an isolated case. There were many former clients who were deceased who were being charged service fees for years after they had died.

In other evidence to the royal commission, we heard that home loans were being approved based on fraudulent material provided by brokers. There were real consequences of this behaviour. In one instance, a family had already paid out significant funds to the builder and had their home loan collapse due to the misconduct of the broker. At the same time, the family was facing the devastating loss of their baby. These are real families with real lives. These are real tragedies, with people being treated as playthings by the financial sector. Claims have been made that NAB staff accepted bribes of $2,800 in order to look the other way and accept loans based on fraudulent documents. NAB staff were incentivised to engage in this misconduct by bonuses that were available to them if they reached certain loan targets. I would point out that I don't begrudge the poor staff, who were often held to ransom rather than incentivised, I would suggest, by their bosses and supervisors.

I thank the Finance Sector Union and the union movement generally for pointing out some of the flaws built into these remuneration systems. The banks and their staff have been getting richer at the expense of ordinary Australians, many of whom have been left devastated. Ordinary Australians have lost their homes, ordinary Australians have been left bankrupt and ordinary Australians, I'm sad to say, have even taken their own lives—all because of the exploitive lending practices and just plain greed of the big banks. The conduct of banks and the financial sector affects each and every one of us. We all have those constituents.

It's impossible to go through life and not have some relationship with a financial institution. If you hold a bank account, use a credit card, apply for a home loan, hold insurance or are a member of a superannuation fund, you'll have a commercial relationship with a financial institution. You rely on your bank or financial institution to act responsibly with your money and to do so in your interests. We've all assumed up until now that that is what they were doing. The sad reality that we're now all aware of, thanks to the banking royal commission, is that they've been playing us for mugs. Even worse, they've been playing us for mugs and the Turnbull government has been protecting them.

Prime Minister Malcolm Turnbull was brought kicking and screaming to having a banking royal commission. He didn't want it. His team didn't want it. They tried everything they could to avoid it and, in the end, they only called it when the banks told the Prime Minister to do so. We know that the Turnbull government will always look after the big end of town. His background is in banking, as it is for so many of the frontbench.

Labor will do all it can to make sure that ordinary Australians have the protection they need, that the culture of misconduct in banking is stamped out and that our financial institutions serve the nation, not the interests of a greedy few. Labor supports this bill. Labor support our corporate regulator, ASIC, and we wish them well. Labor will always support measures that assist ASIC to operate effectively and efficiently.

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