Sue Lines (WA, Deputy-President) Share this | Hansard source

Last week I was in the Pilbara, in Karratha, to listen to the impact that financial institutions, particularly banks, administrators and liquidators, have had on local people during the boom and bust associated with the mining boom. Labor's been holding roundtables across the country to give people who've found themselves to be victims at the hands of the banks an opportunity to tell their story. Up in Karratha I held two small roundtables and then a larger meeting. We heard the most alarming and concerning evidence from people about how disgracefully the banks—in particular, Westpac—had behaved. I thank all the people who told us their stories. I acknowledge how difficult it is to tell your personal financial story—how it's affected you, your family, your life and your businesses. So thank you to those who came along. I'd also like to thank the Pilbara Community Legal Service for the statements they gave us of the people they've assisted. I particularly want to thank Labor's member in the Pilbara, Kevin Michel, who, along with his team, got those people along to tell their stories.

I said at the outset that I did this because the banking royal commission hasn't heard from many—just 26, I believe—of the individuals whose lives have been affected by the disgraceful behaviour of the banks. I would urge the Morrison government to give the royal commission more time, and I would ask the royal commission to visit the Pilbara, because I think this region has a particular story to tell. Sadly, I doubt that the Morrison government is going to extend the time of the royal commission, because this government had to be dragged kicking and screaming to the establishment of the commission. In fact, Melissa Price, the member for Durack, voted 26 times against the establishment of a royal commission—a royal commission that Labor pushed for, which was eventually established. And remember: it was our Prime Minister, Mr Morrison, who said that the call for a royal commission was a 'populist whinge'. He went on further to say that Labor's call 'threatened to undermine a key pillar of the Australian economy'. He described our attempts to establish the royal commission as 'reckless political games'. He, Mr Morrison, along with the member for Durack, Melissa Price, voted against the establishment of the royal commission 26 times. It just shows you how out of touch they are with the issues and concerns of ordinary Australians, particularly those in Ms Price's electorate of Durack and those living in Karratha.

I want to talk about some of the people I met and put their stories on the record here. Some of them are exclusive as to the sorts of extremes we've seen in the Pilbara. A gentleman came to see us who runs a large family business. He wanted to extend the business. He wanted to buy another business, worth about $4.5 million. At that particular time, Westpac offered this family $50 million. There was no business plan, there were no documents, there was no business case—nothing—just a verbal agreement: 'Here, have $50 million.' That's how much cash was floating around in the Pilbara during the boom. So he took it. Later, when the paperwork came, Westpac was going to charge him an interest rate of—wait for it—16 per cent. That is 16 per cent on $50 million. Can you imagine? This gentleman took his matter to the Ombudsman, who, he said, was weak and pretty toothless. The Ombudsman at that point negotiated a $10,000 payment, but of course this gentleman told him where he could put that. We know that, on this occasion, Westpac didn't adhere to its own code of conduct. This matter went to the bank's internal complaints department, but there has been no real resolution of this matter, and it remains a live matter today, where Westpac initially offered $50 million.

We heard some common themes from the people we spoke to. We heard that money was just given out like confetti. I can't think of any other way to describe it. There was never any paperwork or any kind of business plan—nothing. In fact, one gentleman told us that, at the height of the boom, the Pilbara, Karratha, had four loan managers. That's how keen they were to give people money and put them into debt. The bank manager would often ring him up and say, 'Hey, mate, we haven't really met our KPIs on fixed term; can I offer you a fixed term?' It was as though it was some commodity being traded backwards and forwards. Money was just being thrown at people with gay abandon. I have to say that, after hearing this story, I was pretty gobsmacked—but there was worse to come.

We then heard from a not-for-profit who had money that the state government had given him to set up—funding of $2 million—and they owned property, and yet the bank took four months to secure a loan, which obviously cost that NGO a lot of money. We heard the story of a woman and her husband who had built during the boom in Karratha—so they paid a premium for the house they built—and they also bought an investment property. Sadly, seven years ago, her husband contracted cancer and died quite suddenly. This woman is a JP and a marriage celebrant and a long-term resident of Karratha. All of these people are long-term residents of Karratha. Without any paperwork, without any payslips, without any investigation into this woman's capacity to pay, the bank simply transferred that debt. Despite working four jobs, there was no way she could pay the $4,500 a month that Westpac was charging her for the two mortgages. Eventually, after grinding herself down, this woman had no option but to declare bankruptcy.

As some of us in this chamber would know, if you're going to be a JP and a marriage celebrant, you have to be a fit and proper person. So, suddenly, because she was bankrupt, not only did she lose the home she had shared with her husband, lose the investment property and have massive debt; she also lost her livelihood, because she lost her licence to be a marriage celebrant and she lost the ability to be a JP. Thankfully, this woman, who now lives with her family, because she has no ability to pay anything or to take out any loans because she is a bankrupt, was able to fight to re-secure her JP licence and her ability to be a marriage celebrant.

We know that the banks well and truly preyed on people in Karratha. It seemed there was a loans department where everything was hunky-dory and you were offered the world, and then there was the hardship department, which really didn't do much for people. Nobody in Karratha had a good word to say about the hardship department. Then there were the credit managers, once you got into a bit of difficulty. In fact, the gentleman who was given $50 million by Westpac was told by the bank, 'It doesn't help your cause to take us to the ombudsman.' Threats and intimidation were common themes in the stories that I heard in the Pilbara. One man told us that, after the bank's credit department went after him, he spoke to a receiver who said, 'I'm a mad dog and I'll come after you and eat you up unless you give me $150,000.'

This is how the banks have been behaving, completely unfettered, whether it's handing out money or forcing people into bankruptcy, in the Pilbara. Yet this government, the Morrison government, and Melissa Price, the member for Durack, voted 26 times against a royal commission. It's best summed up by a young man who gave us a written submission. He is a finance broker. He said:

It's much more than a populist whinge. It's about our values as a nation and whether we want to sell out so completely to economic rationalism that we lose sight of the fact that we owe each other and every one of our fellow citizens our support and love.

And he is a finance broker. So we know banks can behave differently. The commission needs to be extended.