21 April 2016
by Urban Wrongski
Turnbull has no intention of cleaning up banking.
“Not all bankers are greedy, profiteering, heartless bastards” says the PM, airing his fabled diplomatic charm and finely nuanced business skills after the cheese and port at the Westpac Bank 199th birthday bash, 6 April, “but those who aren’t should blow the whistle on those who are.”
As with many of the PM’s recent homilies, it is a bizarre tack to take. Not that it is all up to the banks themselves to clean up their acts. ASIC MKII with extra funds will help keep our banking industry’s usurers and loan-sharks on the straight and narrow.
Even if it has been a complete failure in the past – and despite being designed to go after corporations and not banks. And under-staffed.
Despite a senate inquiry which found on 26 June 2014 it was not up to snuff and suggested a Royal Commission, a bigger, better ASIC is sold as the answer.
Bankers, under Liberal governments especially, whom they fund most generously, are in a class of their own. Despite doing very little of anything productive, except to make profits out of other people’s industry and trust, banks bask like sharks in the status of an industry. And for the Liberals it is a protected industry.
Turnbull has factored both natural sloth and potected species status into his cunning reforming plan. It won’t all be one great orgy of self-reporting fraudulence. A newly rebooted ASIC will be the tough new (recycled) cop on the block. Or so he says.
ASIC will even get some of its $120 million dollar 2013-14 Budget cut back courtesy of the same government. Overnight, the regulator will be transformed from paper tiger to a bigger, fatter, slower, pussy cat.
The PM, himself, is busier than a cat watching two rat-holes. His government now, due to its own ineptitude and tactical blundering, has a feral Senate on its hands with two weeks to kill after its “let’s bring back the ABCC” bill was thrown out in a day.
Cross-bench senators may have been turkeys voting for Christmas over their dismissal of the ABCC legislation, but they were focused turkeys. The focus is back on corruption. And anti-Turnbull government with a vengeance.
The Liberals’ cunning plan envisaged weeks of wrangling and nifty anti-senate maverick cross bench bad press for the propaganda mill.
Now the government is forced into a politically embarrassing and potentially disastrous end-game. Labor’s Penny Wong has successfully summonsed Arthur Sinodinos to explain his role in dodgy NSW Liberal fund-raising. This was not part of Turnbull’s “brilliant and audacious” scheme.
Yet the PM is no slouch when it comes to jawboning and droning on about banking reform.
Turnbull will restore $57 million – almost half of the funding cut by Abbott and Hockey in 2013. Half of the several hundred staff it sacked may be re-engaged or replaced. But the PM’s main game plan remains DIY anti-corruption by insider whistle-blowing and a bit of finger-wagging from himself as coach. It’s wet, it’s weak and it’s won’t work.
Unsurprisingly, the PM’s speech does not go over well. Some of his audience go off like a frog in a sock. The gruntled wunch of bankers at the birthday bash suddenly turns ugly when after dinner speaker, Turnbull appears to acause them of malfeasance and roguery, in the best banking tradition, betraying former colleagues, scandalising them with an unexpectedly blunt, broadside.
Some are outraged at the jumped up former merchant banker. Mortified. Who farted in church? Others voice the proposition that the PM’s public embrace of banking reform will only confirm to the public that there is a banking problem. Now that is a conundrum.
Doubtless the conundrum of the government’s love of banking problem, a tough love that dare not speak its name, will be aired repeatedly on the hustings once Turnbull gets the bottle to formally declare his 2 July election date and begin the longest, dunless, least-advised and coyest (so far) in Australian political history.
The PM does, however, avoid the word ‘scandal’. It can’t be easy. He invokes higher principles – risking losing or further confusing every banker present. Reciprocity, for example, is surely in order, he thunders given taxpayers once rallied to carry the banks though the GFC:
The bankers glare back at him with pursed lips. Most must, surely, know by now that the PM is just an ineffectual windbag and hopeless hog-washer but their faces register disgust, nevertheless, at his insolence, his lese majeste. Most note, nevertheless, in the margin of the ledger of their discontent that he proposes no action.
Turnbull’s serve, of course, is all for show. It is aimed less at righting wrongdoing, such as ANZ and Westpac’s current prosecution for illegal home loan rate fixing, than the need to be seen to be doing something about the industry as it is designated today, where the term industry is widely and loosely applied to any form of commercial intercourse including prostitution.
Yet he does cut through, judging by the bankers’ anger. No-one in the industry mistakes the PM’s studied indirection. He does not have to spell out how our Big Four dodge tax or give conflicted investment advice or deny insurance payouts and sundry other ways the industry can make its customers suffer, including, as Mike Seccombe nearly summarises in The Saturday Paper:
There is of course much more but it’s enough to have anyone reaching for his antacid. Labor has helpfully provided Seccombe’s newspaper with four closely typed pages detailing seventy separate acts of financial malfeasance, supporting its case for a Royal Commission.
Yet for the last ten days, the government’s case is that bankers must never be brought to any Royal Commission lest it cause a loss of confidence in the industry. Things are really crook in banking, we know, runs its logic, but let’s not do anything to frighten the horses. Lose confidence in the system. As if there were any confidence left.
The Turnbull lecture is quite a show. The PM calls upon on his sure grasp of banking history and tradition, to say nothing of occasion and convention, to lecture his former colleagues about their fixation with profit and personal gain,.
Yet he makes it perfectly clear that all he is prepared to do about it is half of sweet Bugger all or this ritual public flogging with a limp salad green.
Meanwhile, Turnbull and his hugely underperforming treasurer, Scott Morrison, endlessly tell the nation that ASIC is doing a simply marvellous job of holding our Big Four to account in spite of all the evidence now tabled.
Assistant Treasurer and former banking employee, puppet Kelly O’Dwyer maintains there’s nothing wrong in her being sponsored by banks at precisely the time when there is every reason for detachment and objectivity. It’s world’s best practice, surely.
Morrison repeatedly claims in his unique manner, like a racehorse at the gallop, that the regulator has more powers than a Royal Commission, ignoring its manifest failure so far to bring any banker to book, a failure rooted deeply in Westpac’s origins.
Westpac was founded in NSW as the Bank of New South Wales in 1817 by Governor Lachlan Macquarie but it was almost ruined when, in 1821, Edward Smith Hall, its Chief Cashier, made off with half its subscribed capital, none of which was ever recovered. Yet it has never looked back since.
The transfer of funds seems to have done Hall less harm than his reformist political views aired in his newspaper, The Monitor, which put him to jail on charges of sedition until a change of monarch caused Governor Darling to pardon him. Even then, the bank was too big to fail.
And so today, our banks must be protected, at all costs, from themselves and from that low-life Shorten’s plans to call a Royal Commission, plans which would utterly destroy consumer confidence in an untrustworthy bunch of mongrels who are interested, as the PM so aptly puts it, only in profit and personal gain.
Not only would a Commission undermine the reputation and credibility of our banking sector, Shorten’s promise is just another “distraction, a thought bubble”, a sentiment echoed by the Treasurer in a rare display of consensus, his head weaving, his lips flecked with foam.
Shorten replies that the banks have already done a good job on their reputations themselves.
ASIC, both Turnbull and Morrison claim, is already perfectly equipped to do the job although the Senate inquiry in 2014 found exactly the opposite to be the case.
According to Morrison, ASIC has the same powers as a Royal Commission, yet it is set up to look into corporations, not banks and it has a lamentable record of failure.
ASIC has failed to stop banks’ overcharging on credit cards, colluding to fix interest rates for home mortgages or prevent financial planners providing conflicted advice. CommInsure, the Commonwealth Bank’s insurance arm has refused to pay out on insurance claims even pressuring doctors to change diagnoses. ASIC, the corporate watchdog, has merely looked on.
Even the Liberals are divided. Almost immediately, Turnbull is publicly contradicted by eight Liberal MPs. Mackay MP George Christensen, a prominent Delcon, (delusional conservative working towards Tony Abbott’s return) wants a Royal Commission as do a handful of Nats including Warren Entsch and the champion of reform, senator John Williams whose comment echoes the PM’s moral tone.
“We get dog products, dog advice in a culture of profit, profit, profit and to hell; with everyone’s security”
Propping up ASIC is the government’s lame answer to those now on both sides who call for a Royal Commission into banking because of a series of big bank scandals which have led to a crisis of consumer confidence. These critics won’t be fobbed off.
Pretending ASIC is up to the job is preposterous – as preposterous as calling on Australian banking to clean up its act via whustle-blowing. Or that a bit of Prime Minsterial finger-wagging is anothing better than a pea-shooter against a rhinoceros.
ASIC is a failed regulator, already discredited by the 2014 senate inquiry as too “timid”, “inept” and too “gullible” to do its job in an industry, the committee noted, in which whistle-blowers fared badly – before ASIC had its staff and funding cut.
Spare us the moral posturing, Mr Turnbull, you have no intention of getting banks to clean up their act, even if you had the means to achieve it. There is a list, a long list of banking malfeasance to attend to but your latest efforts are as laughably inept as your audacious early election gambit, already seriously unstuck in the senate.
And if a Royal Commission costing $80 million running for two years but achieving nothing was good enough for Labor’s union backers, a Royal Commission into the banking industry, is the very least you could offer the nation – despite your party’s indebtedness to banks for its funding; despite the love that dare not speak its name.