Sam Dastyari (NSW, Australian Labor Party) Share this | Hansard source

My apologies; I was enthralled by the comments that were made by Senator Lambie, and I did not realise she was just coming to an end. I want to begin by touching more broadly on the context of why the Banking and Financial Services Commission of Inquiry Bill 2017 has come about, and I want to begin by congratulating Senator Whish-Wilson. I think this is a very fine bill. I think the intention of this bill is very good. I believe it is unfortunate that this bill is needed at all.

There is no point in pussyfooting around this: this is a second-best option to the option that I think a lot of us in this chamber would prefer and on which I believe the chamber has expressed its will, and that is a royal commission. What Senator Whish-Wilson has tried to do is say: considering that the government has made a clear decision and that royal commissions are a matter for the government, what is the next-best option that would be available to those who want to pursue a royal commission? I think, unfortunately, it is always a misfit to try to create a piece of legislation to achieve what a royal commission would otherwise be able to achieve. That being said, I believe that Senator Whish-Wilson has certainly done his best in this bill to achieve that. I believe it is a good bill. I believe it is a bill that is worthy of support, but I do believe it demonstrates the limitations on what is available to us when we do not have a government that will support a royal commission into Australian banking.

What we have really seen is a government that has floundered on this issue, that has danced around this issue and that is trying to pick and choose parts of the issue. But the reality is we need a royal commission into Australian banking. We need to have the powers of a royal commission. We need to have the scope of a royal commission. What Senator Whish-Wilson has put together here is essentially a legislative fix to try and achieve those types of powers in the context of a government that does not want to have a royal commission.

A royal commission is the only way to get to the bottom of the rip-offs, the scandals and the misconduct that we have seen in the sector over recent years. In the absence of any leadership from the government to establish one, I think this is a good bill. I believe it is a bill that should be broadly supported. But I have to say I do not believe, unfortunately, that the process we are going through here, aside from doing the important role of this chamber—which is highlighting issues—is going to be able to go anywhere when the government obviously has the majority in the other place.

In that light, I want to acknowledge the work that Senator Whish-Wilson and certainly the Senate Economics References Committee have done over a long period of time, and the work of the parliamentary joint committee between the House and the Senate on these matters, to highlight and bring out these issues. We have had the unfortunate situation where Senate and joint committees between the Senate and the House have had to be used as a vehicle to have whistleblowers be able to tell their stories and expose some of the worst behaviour and some of the worst conduct that has gone on in Australian banking. While I am a big advocate of the power of Senate committees, unfortunately their powers are limited and their ability to expose issues is limited. What we use these committees for—I think quite effectively—is to highlight issues and bring to attention issues that need further scrutiny. The reality is that what we have seen in banking is story after story and victim after victim. It is something more than just the processes that we have seen. Every time we look, we find something new. Every time we investigate a different matter, we find something new. And at the heart of it all has been a culture in Australian banking that is at odds with what the Australian public want and expect.

Senator Back made some comments earlier that I was largely supportive of. Senator Back firstly pointed out a whole series of measures the government has taken. I believe they are mostly good measures. I believe they are measures that are aimed to achieve good outcomes, but I do not believe they go anywhere near far enough on what is warranted and needed to get to the bottom of a lot of what has happened. I believe the measures from the government have been piecemeal; they have been weak and they have come kicking and screaming. While most of the measures that he has cited individually have had bipartisan and tripartisan support, some of us who have been dealing with these issues have felt they have not gone far enough into what is actually needed.

The argument that I really want to dispute is this notion that says: 'Look, with the Australian banks—that is, big private companies operating in the private sphere—frankly there really isn't a role for government. What would be the role of a royal commission, or in this case the second-best option, which would be a kind of commission of inquiry done by legislation?' The broad argument rests around this idea that somehow, because banks are businesses, they are private. I want to remind everybody that, when the banks were in trouble, the Australian public went out there and committed to securing deposits. The Australian public guaranteed the Australian banking sector. That protection the banks have been given is a difficult one to monetarily quantify, but at that time it meant a lot.

There is a social contract between Australian banking and the Australian people. We all want profitable banks. Our issue is not that the banks are profitable. I hope the Australian banking sector remains strong and profitable. We recently had another quarter of economic growth—our longest run of economic growth in history. A large part of that has been because of an efficient banking sector.

The fact that the four large banks have made somewhere around $30 billion of profit in the past couple of years consistently should not be looked upon as necessarily a bad thing. I think it is a good thing. I think their profitability is a good thing. But sometimes I think the banks and the institutions forget that there is a social contract that is part of that. To have the types of guarantees that the Australian public is prepared to give them, they have a responsibility as well. Their responsibility is to actually be there for the Australian community and to give back. Some of the cultural behaviour that we have seen has been reprehensible.

This is not a matter that has really been for one side of politics alone. I note that senators like Senator Whish-Wilson—obviously, the Greens have moved this bill—and 'Wacka' Williams from the Nats have been quite involved. I note that the One Nation party—and I think Senator Roberts is going to say a few words about this later—has been incredibly active on this issue, as well, as have many members of the Liberal Party, including Senator Fawcett. The issue around Australian banking is one where there is a large amount of agreement in this chamber—if not unanimous agreement—that there has been a problem with behaviour, a problem with culture and a problem with conduct. Where I believe the political disagreement rests is in: how is the best way of addressing that problem?

There are those on the opposite side of the chamber—and I do not want to pre-empt their arguments for them—who have made the argument outside this place many times: 'What would a royal commission achieve? What would a commission of inquiry actually achieve? We already know what the problems are. Instead of looking at exposing more problems, just try and legislate and fix the problems that we know are there.' I believe that is the wrong way of approaching this because we do not know what is there. We know what we know. We know about CommInsure. We know about NAB. We know, to differing degrees, about the bill bank swap rate. We know about some of the matters at the ANZ. We know about some of them at the NAB. We know about discrete matters. We know a lot of individual cases of people who have been taken advantage of, especially in the rural sectors. We know bits and pieces around the CBA. But the depth and the scope of it, I do not believe, can really be adequately addressed until we really get to the bottom of what has gone on and what has happened.

I did want to use this opportunity to speak on this bill today to put on the record a view that I have had for a period of time as to what would be the types of solutions that we should be looking at for these types of problems that I believe a commission of inquiry or a royal commission would really be able to look at. The one that I really want to stress is this idea of a scheme of last resort. The Senate Economics References Committee—Senator Whish-Wilson is quite familiar with this—spent quite a bit of time looking at this in different shapes and forms. It spoke to a few people about it. The idea is this: there has to be a safety net for the victims, in particular the victims of financial advice. Through no fault of their own, they have gone through a process in good faith and, at the end of it, have been left destitute.

A scheme of last resort—there are similar schemes in places like the UK. There are ways of handling these issues where you are able to adequately deal with matters that are at times legitimate, like moral hazard. You can have a prospective scheme. You can have a retrospective scheme, if you want. You can have a scheme that caps it to individuals. You can have a scheme that caps it to a certain amount. There are practical solutions that can address the horror stories of the victims. Frankly, my argument has been—and I am not saying anything in this chamber that I have not said to bank executives in the opportunities that we had through the Senate committee processes to discuss this with them: a system that leaves victims and people behind undermines the entire confidence in the system as a whole. And that is in nobody's interests. That is not in the interests of the Australian banking sector. That is not in the interests of these larger corporations and these larger banks.

I welcome this bill. I congratulate Senator Whish-Wilson for being able to get so much cross-party support for it. I think it is a fine piece of legislation. I do not believe, Senator Whish-Wilson, that this bill goes far enough. I do not believe this bill achieves what we really need, which is a royal commission. This a bill that has been created in the context where the will of this chamber, which is to have a royal commission, is not shared by the other place. As a result, this is the best thing that we can do.