Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I am very thankful for the unanimity of this place—the bill obviously would not be going forward without the support of the member for Dawson, who showed immense courage in crossing the floor on the ethanol bill, which is so important to us in the sugar industry—and now, again, on an issue that every Australian agrees with. I doubt whether there would be five per cent of this country who would say that an inquiry into the banks is not needed. Everyone agrees to this, except the Liberal Party. They are the only people who disagree. And their isolation is standing out now like a neon light, and the cowardice of those people who have advocated it yet, when it is put into the parliament, cannot be found; they will be hiding in the toilets. We must note the courage and intellectual integrity of some and the cowardice of others.

The Sunday edition of The Australian the week before last had its entire front page taken up with what is, quite frankly, the imminent collapse of banking in Australia. Nearly a third of Australia's population lives in good old 'NSW': Newcastle, Sydney and Wollongong! It is nearly of a third of the Australia population. In Sydney, the average price of a house is over $900,000 and the average for the area is well over $750,000. That means that the repayments are in the order of $35,000, the interest is in the order of $30,000 and the annual charges are about $5,000. That is $70,000 that they have to find if they want to buy a house. Well, the average weekly income is $72,000, or $50,000 after tax. So, even if the husband and wife are working, their situation is perilous.

And what are the banks going to do? They got through the GFC, but not because of the prudential responsibility. Lending people $900,000 for a house is hardly prudentially responsible. It was non-recourse lending. That was the issue. They have recourse lending here in Australia, and they have been able to control this parliament to date. In the United States and most of the rest of the world, if you cannot make the repayments then the bank can take the house. Invariably they will lose some money, and of course the person loses the house. So, they share the responsibility of having made a bad contract. In Australia there is no sharing of responsibility. The bank gets the house and gets you as a debt slave for the rest of your life. You carry that debt for the rest of your days, and you will have no hope of carrying it out. If you cannot keep the repayments up on the house there is no way you are going to be able to repay an outstanding debt of $100,000 or $200,000. When the bank finishes you off they put a whole lot of extra hits in.

I get on well with the Deputy Prime Minister. I have a lot of admiration for him in some ways. But he said there were four farmers in trouble in North Queensland. Well, the Catholic priest in the greater Longreach area said that there were 42 farms being foreclosed on—station properties, families. Charlie Phillott—the now-famous Charlie Phillott, twice on 60 Minutesnamed 13 properties in his area of Winton that were being foreclosed on. I knew of eight in the area south of Hughenden and Richmond—the Muttaburra and Aramac area—eight. Well, that is 55, 63, being foreclosed on, in just three areas—there are 48 local government areas, but this is just in three areas alone. Well, he listened to the banks; that is what the banks told him: 'There are only four in trouble.' Can you get a more extraordinary case of lying and deceit?

When they had a pitiful inquiry here, all the bank bosses came up and said, 'Mea culpa! It's my fault! We've done wrong. We will have to fix up our act.' I mean, it was very funny, really, to see them all lining up, one after the other, doing their mea culpas, bowing their heads, and saying, 'We've done wrong. We've got to try harder in the future.'

I know what 'harder' will be! And let me give an example. When the ANZ bank and Westpac were technically insolvent in the late 80s, something had to be done to rescue them. So the interest rates were taken up. I can remember clearly borrowing at 6½ per cent, and I said, 'I'm right for forever because, even if the rate doubled, to 13, the highest interest rate ever recorded in Australian history, I'll still be right'. In the second last year, on St Francis, we were paying 29 per cent, interest rate with charges, and I can assure you, we were not Robinson Crusoe.

So, when the banks get into trouble, what happens? 'We put the whip to the galley slaves, the poor beggars who have borrowed; we'll have to get the money off them.' Did any of the banks get punished? No! In fact, they took their incomes from $790,000 in that period up to over $8 million, on average. What more than 20 or 30 of us could save in an entire lifetime, they make each year. And yet the government says there is no necessity for an inquiry.

On the recourse lending, we are out of step with the rest of the world. We have a pending collapse of the market in Sydney which will do I don't know how much damage to the banking institutions of Australia.

Let me concentrate on the injustice of the system. I will use one quick case from my own area, of a family that had been on the land for five generations. They had borrowed money for this place. The government cut off the live cattle export market, which collapsed the price of cattle—cut it clean in half. They then had a series of dry seasons: the longest series of dry seasons—not the worst drought, but the longest series of dry seasons—in northern Australian history. And the banks hit them. That is all right. The banks can hit them. That is fair. That is right. Right? Except you do not sell the station in November when there is no grass and the cattle are dying. You do not sell it then because you will not get any money for it. And if you have got a $12½ million asset and you cannot find a buyer, you need two years. I interviewed a number of stock and station agents and they said, 'To get a decent price, you need two years; under six months, it is Flashdance prices—you will get nothing.' Well, this was sold in six weeks; a $12½ million asset was sold in six weeks. And instead of getting $12½ million they got $6 million for the sale. The son committed suicide. The father lived in the shed; he would not go near the house where his son had committed suicide. The mother could not talk; for three months she was unable to speak at all. He was asked to sign a document—and please God we can get this into the courts. He was told, 'Sign this document because we don't want to throw your wife and kids out into the street.' They were living in Charters Towers. 'Your poor little kids thrown out in the street—we don't want to do that. But you've got to sign this document or otherwise there's nothing we can do about it; we just foreclose on your house in Charters Towers and your wife and kids get thrown out on the street.' So he rang me on the Friday, agonising about it. He rang me again on the Sunday, agonising about it. But what this is is proof of duress! The legislation is quite clear: if you are a powerful figure and the other party to the contract is a weak party to the contract, then you must act as if you do not have that power. Well of course the bank just got them to sign a document saying, 'We can do anything at all to you, and you're not allowed to talk to anyone or say anything'—absolute proof of duress! We cannot get a case before the courts because these people are bankrupt; they have got no money. And there is no necessity for— (Time expired)

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Is the motion seconded?

Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

I second the motion moved by the indefatigable member for Kennedy and reserve my right to speak.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Denison. The question is that the bill be now read a second time. The time allotted for this debate has expired. The debate is adjourned and resumption of the debate will be made an order of the day for the next day of sitting.