Jenny McAllister (NSW, Australian Labor Party, Shadow Cabinet Secretary) Share this | Hansard source

Labor won't be supporting this motion by Senator Roberts. We acknowledge many of the issues that are raised by the community in relation to bank practices, and later in my remarks I will speak a little about some of those issues and the ways that they were revealed in the royal commission. But we know also that the current Banking Code of Practice as approved by ASIC is far from a perfect document, and it doesn't go far enough in protecting the interests of customers or small businesses. However, this code is a strict improvement on the 2018 Banking Code of Practice that it replaces. It provides, amongst other things, additional protections against fees for no service being charged to deceased customers, and we note that a rejection of the approval instrument risks taking these protections away from consumers. So, while we don't support the motion, we do urge ASIC and the ABA to work together to support the Banking Code of Practice, and the government to more rapidly implement the findings of the Hayne royal commission.

Community groups, rightfully, are angry—angry about the banks and their conduct. At the royal commission, we found out that the customers of the major banks were being charged fees for no service at all. We found out that the Commonwealth Bank, through their insurance arm, had misled the Financial Ombudsman Service and withheld medical opinions to avoid paying insurance fees to an individual who had suffered a heart attack. We found out that the National Australia Bank had seen widespread noncompliance amongst its financial advisers in relation to proper witnessing processes. We found out that the ANZ had fallen short of community standards in applying responsible lending obligations to home loan customers. We found out that Westpac had not complied with its responsible lending obligations when increasing credit card limits. Those are only a handful of the stories that were heard at the RC. It is not surprising that the community is fed up and the community wants things to be better.

This version of the banking code is an improvement, but our view is that it does not meet the standards set out by Commissioner Hayne. Commissioner Hayne recommended that the ABA amend the code to provide that banks work better with customers who are not adept with English. This new code does not address that recommendation. Commissioner Hayne recommended that the banking code incorporate provisions relating to default interest on loans secured by agricultural land in a drought area. Even though much of the country remains gripped by drought, this new code does not address that recommendation. I understand that the ABA is working to improve the code, and I urge them to rapidly implement those recommendations made by Commissioner Hayne.

The ABA is not alone in being slow to implement all of the commissioner's recommendations. Labor introduced legislation back in February to end the practice of grandfathering conflicted remuneration, but the government only passed legislation to do so in late October, and the government's legislation takes effect a full year after the Labor bill would have. The government has put off action on hawking until sometime in 2020, even though the issues with the hawking of insurance products were clear well before Hayne reported. The government has yet to issue exposure draft legislation on the removal of the claims handling exemption, even though its own road map claimed they would introduce legislation to the parliament by the end of 2019. There are only eight days left.

So it is not surprising that the community is concerned that the government and the banks are not taking the royal commission seriously. There is a lot to be done, and improving the banking code of practice is part of that task. As I noted earlier, although this code of practice is not perfect, rejecting it—which is what we are being asked to do today—risks taking protections away from consumers. That is why Labor will not be supporting this motion.