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Banking scandals ‘biggest wake-up call in corporate history’: Labor

Labor leader Bill Shorten has called on the government to extend the financial services royal commission, stating that the banking scandals were “the biggest wake-up call that we’ve seen in Australian corporate history”.

Speaking after one of Labor’s royal commission forum hearings in Whitehorse, in the federal seat of Deakin, Labor leader Bill Shorten reiterated his calls for the banking royal commission to be extended.

While Mr Shorten said that he thought the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was doing a “good job” and that the party was “very grateful for the job they are doing”, he said that the case studies he had heard from the town hall meetings were “very disturbing”.

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Noting that the “victims” of the banks were “not isolated exceptions, they are our families, neighbours, small business, people in our community all around us”, the Labor leader said: “We’ve heard from people who were the victims of crime and then became victims of crime again reinjured through the processes of careless greedy negligent banks…

“The banks should be ashamed of themselves. In Australia, if you steal from the banks you go to jail, but if the banks steal from you, they get a bonus and a promotion and a bigger profit.”

He added that there was a “culture of greed which has blinded banks and financial institutions to their ethical and moral obligations”.

Mr Shorten went on to say: “Some of the conduct we have heard is illegal and you shouldn’t have to pass a law to say don’t charge dead people for services that they are not getting. Some things are allowed within the law and they just exploit it. How do you legislate to tell the banks not to behave like bullies?”

The Labor leader went on to criticise the regulators, whom he argued issued the equivalent of “corporate speeding tickets” to banks.

“The regulators have found this royal commission to be highly embarrassing as they should,” Mr Shorten argued, adding that “the system is broken when it comes ethical protections of consumer and customers”.

Indeed, the Labor leader said that he believed the “people in power and regulators owe a big apology to the tens of thousands of victims of banking in Australia”.

However, Mr Shorten suggested that it was “not enough to come to parliament to apologise” and therefore recommended that the executives at banks should “hand back some of the bonuses they’ve received while they were in charge of banks while they were exploiting ordinary Aussies”.

“It doesn’t change where the victims are, but it would be a good down payment,” the Labor leader said.

Mr Shorten also commented: “I think this is the single biggest wake-up call that we’ve seen in the Australian corporate history. The banking scandals unveiled in 2018 in the royal commission are the single biggest wake-up call in corporate history. The banks need to change; we’ll see if they do…”

The Labor leader therefore called on Prime Minister Scott Morrison to “extend the royal commission”, but he cast doubt on whether this would occur, noting that Mr Morrison had previously voted against the banking royal commission 26 times (while he was in his role as Treasurer).

Treasurer slams Labor’s royal commission “roundtable”

The Shadow Minister for Financial Services, Clare O’Neil, is currently travelling to cities and towns around Australia that had not been visited by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to hold a series of roundtables with victims.

The move, which was announced following the release of the commission’s interim report, aims to highlight more cases of misconduct, and was announced by Labor earlier this year, with Mr Shorten outlining that despite more than 9,300 submissions being sent to the commission, the hearings had so far only heard from 27 customers.

Mr Shorten said at the time: “All of the hearings of the commission have been in just three capital cities; regional and rural customers have not had a sufficient chance to have their say in this process.

“Misconduct in the financial services sector is a national issue, and Australians across the country deserve their chance to be heard.”

However, federal Treasurer Josh Frydenberg has censured Mr Shorten for “threatening the independence, the authority of our royal commission”, stating earlier this month: “Bill Shorten first thought that he knew better than the royal commissioner saying there must be an extension of time, when the royal commissioner has yet to ask for it. Now he thinks he is the royal commissioner by conducting his own hearings and running a parallel process around the country.”

However, when asked whether the government would extend the commission further, should Commissioner Hayne ask for one, the Treasurer has previously said: “If he asks for more time, he has got it.”

[Related: Regulators ‘have a case to answer’]

Banking scandals ‘biggest wake-up call in corporate history’: Labor
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Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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