Deborah O'Neill (NSW, Australian Labor Party, Shadow Assistant Minister for Innovation) Share this | Hansard source

I rise to continue my remarks which I commenced just before question time today with regard to the Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2018. In my opening remarks today I indicated that there were serious concerns about what the government were attempting with this bill. The sector seems to be quite happy to have a modesty skirt, basically, to protect them from proper scrutiny. I want to repeat a couple of the remarks from Choice, who didn't describe it as a 'bear that had any teeth'—in fact, they said it was more of a 'teddy bear' as a piece of legislation. I think that's absolutely the case.

If we go immediately to some of the details of what this bill does in terms of setting out the accountability obligations of authorised deposits-taking institutions—which for most people generally means banks—we see that this is what they're saying banks should do: 'A bank must take reasonable steps to conduct its business with honesty and integrity and with due skill, care and diligence.' I'm waiting for that to settle, because I can't understand why we're stating that in a bill here. That should well and truly already be the case. If that's one of the goals of this piece of legislation, it just shows you how desperately bad things are in the sector. ADIs must take reasonable steps to deal with APRA in an open, constructive and cooperative way. For those who might be listening to this debate and who don't know what APRA is, they're the government authority that makes sure that banks and other major institutions that have fiduciary responsibilities are doing the right thing. This is supposed to make the banks open, constructive and cooperative with APRA. This accountability obligation that's supposed to come in now is a far cry from what people have expected their banks should be doing all the time. What we see just in those two elements of this bill is an important part of why it should exist. It just goes to show how desperately bad the cultural practices of our banks are.

I want to indicate clearly that Labor is not going to stand in the way of this legislation, but, my goodness, it's a low, low bar that has been set by this piece of legislation: 'Naughty banks! You should play nice with APRA. You should be open and transparent.' It's just really not good enough. We know that the Labor Party, for a very long time, has been very concerned about systemic, structural and cultural issues that are facing the banking and financial services sectors. During the course of the Senate inquiry that was held into this bill, evidence was not provided to the contrary. The evidence that was received indicated that, if this BEAR legislation—the legislation that is before the parliament today for debate and that perhaps will be voted on tomorrow—had been in place, it probably wouldn't have had the impact required to change the banking practices and outcomes.

We know that more needs to be done, because there have been a multitude of banking scandals. We seem to be hearing about them on an almost weekly basis. Labor has been calling for this government to take seriously the entrenched issues in this sector by having a proper royal commission, in which the terms of reference are very, very carefully considered, where everybody who could be significantly affected—everybody who is a key stakeholder in this—has a say. But, in the hasty way that this government finally caved and delivered a form of a banking royal commission, we saw consultation with a very limited group of people. The banks in particular featured prominently in the consultations that were undertaken. So, after 600 days of delay, instead of a genuine royal commission that could do a proper job, we have this weak piece of legislation. Instead of having a proper royal commission, we've got the banking royal commission that the banks would like to have. We've got the banking royal commission that the banks are willing to have. Banks—we hear them all the time—ANZ, NAB, Commonwealth, Westpac—they've been mentioned by all of my colleagues who've participated in this debate, including Senator Williams and yourself, Acting Deputy President Whish-Wilson.

We have a big problem. The Australian people know it. And we need to have a higher bar set by this government in terms of dealing with that problem. Despite the fact that we're having the banking royal commission that the banks were willing to have, the Prime Minister's reaction to his own announcement of the royal commission was to label it as a 'regrettable' thing. He said it was a regrettable thing to actually have to go and inquire into the banks, which have been so prominently featured in our media impacting terribly on people's lives.

Senator Williams and I have been on the joint parliamentary committee into financial services and superannuation for several years, and we've seen an awful lot come before us. We have heard some incredibly sad stories. And I know that the senator's spoken to many people offline. I think of one story at the Storm Financial hearing that we had in Melbourne. I recall a gentleman sitting at the end of a row of people who came to give testimony about the impact of terrible practices within banking and financial services provision. He was speaking about what it was like for him to feel like he had lost everything—the shame, the burden of failure. He talked about how he drove out and sat under the flight path of planes at Melbourne Airport and considered taking his own life. This is the reality of a failure of culture in our banks; exploitation of people has become a model of operation for profit-making by those with power and agency.

It's not good enough that this piece of legislation is mucking around at the edges. What's even worse is that we're subjected to a royal commission that is inadequate in its terms of reference. What sort of terms of reference can you possibly get when your process of consultation has ignored the victims of the banking sector—like the man I just spoke about who gave evidence in Storm Financial, like the people who have stood up for all the managed investment schemes where they were exploited, and people like Jeff Morris, who stood up about CommInsure? Those whistleblowers, those people who have been working in the banks trying to get their message through—

Debate interrupted.