Clare O'Neil (Hotham, Australian Labor Party, Shadow Minister for Justice) Share this | Hansard source

We don't hear talk of socialism enough in this chamber, frankly. But that was what John Howard had to say. I would be interested to hear John Howard's views now, I really would, because I truly believe that there's not a person in this parliament who could now stand in the chamber and deny the need for this royal commission, because some of the things that have come out are putrid.

What frustrates me the most is not the errant example here and there of some wrongdoing of one particular person in one bank or institution; it is the copious examples we have seen where banks have sat down and made a business decision to rip off their customers. Can you imagine these banks sitting down and saying, 'We are actively going to decide to charge people for services they are not receiving'? It's been very distressing. We've seen a range of responses from people who work in these big institutions to some of the charges that have been laid at their feet. Some of them—'fair cop'—are apologetic, and I think they understand now that that was the wrong thing to do, that they are not licensed to commit what the royal commissioner seems to be suggesting is theft. But there are other people who are appearing before that royal commission who do not take that stance, who continue to sit in the dock and argue that they should be allowed to charge any customer anything because the customer somehow is deeming it to be acceptable by the fact that they have not changed banks or they have not changed super funds.

We know that, try as we might to get Australians to be interested in their financial affairs—and we do ask that of them, and we do want them to be in that situation—we can't rely on people to change banks because they're not getting good services. Every piece of evidence we have is that people are more likely to get a divorce, they're more likely to leave a marriage, than they are to switch banks. There are an extraordinary number of people who are still in the same bank they were in when they were a kid, when they were a teenager and they got their first jobs.

So we are going to have to do a lot better to make sure that we have competition in this sector and that we are demanding and observing good conduct in this sector, because it's not just like any other service. It's not like a pizza delivery shop. The way that these big banks and institutions operate is pivotal to the stability of our financial system. I don't know about you, but I want us to survive the next financial crisis and the one after that and the one after that. What we have here is a once-in-a-generation opportunity to look right into the heart of these institutions and to look right in the heart of the regulators and ask whether this is good enough. I think the member for Chifley would probably agree with me—I think people on my side of politics would agree with me—that a lot of what we are seeing is not good enough.

What I do know is that there is only one side of politics that people can trust to actually deal with this problem, because what we have seen from the Liberals in five years of government is that just about every year there has been some step trying to create an improper regulatory environment for banks and financial services. I'll talk through them. They dismantled the FOFA reforms. Those reforms asked very little more of our financial services industry than that they act in the best interests of their customers—and that was a controversy on the other side of politics. Do you think there is a single person you could stop in the street and ask, 'Hey, do you think banks should be required to act in the best interests of their customers?' and they would say no? But we had a whole side of politics, a whole government, arguing that it was somehow above and beyond that we should require financial advisers to act in the best interests of their customers.

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