Australians want a Royal Commission into the banks - Sky AM Agenda





KIERAN GILBERT: I'm with the Shadow Assistant Treasurer, Andrew Leigh. Do you think that Labor should now rein in the call for a Royal Commission given the sort of scrutiny that we're seeing here this week?

ANDREW LEIGH SHADOW ASSISTANT TREASURER: Good morning, Kieran it's great to be with you and your viewers. Labor's view, as is the view of many Australians, is that a hearing like this is no substitute for a Royal Commission.  What a Royal Commission can do is go through forensically what happened with CommInsure and the Bank Bill Swap Rates scandal, with many of the other financial rip-offs that we've seen that have laid bare some of the systematic problems. What we got yesterday was just an opportunity for a short amount of questions. I know my Labor colleagues had hundreds of questions that went unanswered in their quizzing of the Commonwealth bank CEO. And that means that Australians don't get the answers that they deserve. I think a Royal Commission isn't just in the interests of all Australians, it's ultimately in the interests of the banks as well who want their industry to be seen as squeaky clean whereas over recent years we've really seen a significant fall in the standing of big banks.

GILBERT: But on the issues like the Bank Bill Swap Rate scandal that you referred to and other financial benchmarks, yesterday the Government announced a toughening of penalties on that front. In fact there has been five different measures announced since August from the Government on bank scrutiny. Beyond just a festival for lawyers, what more would that provide beyond these three hour appearances from the bank chiefs?

LEIGH: Kieran, five attempts to distract from the Royal Commission, five “look over there” exercises. Frankly, Australians want a Royal Commission. If it wasn't for the fact that this is a Government headed by a former banker with a Minister for Financial Services who’s a former banker and a Cabinet Secretary who’s a former banker we'd have a Royal Commission. But the thing is that Malcolm Turnbull's is a government of, by, and for the banks. It's not a government that it on the side of regular Australians who want appropriate scrutiny. A Royal Commission can call witnesses and it can make systematic recommendations in a way that we just don't get out of the existing regulators or out of this extremely truncated exercise in which the bank bosses get to tell their side of the story but victims don't have a direct voice.

GILBERT: Could you give the banks credit for the fact that one they're a pillar of our economy and have remained so throughout the GFC and their stability helped maintain the stability and growth in our economy?

LEIGH: We absolutely have strong banks, Kieran. You'd expect the 12th largest economy in the world to have top-200 banks but actually our four are by some measures rated in top-20 banks. But that means that when they go overseas to get that half a trillion dollars that they ask for every year for the international capital markets, they only get it based on a squeaky clean reputation on those international markets. These scandals ultimately threaten that. If the funding costs on global markets go up, Australians pay more on their mortgages and they'll pay more on their credit card debts, they'll pay more on their car loans. So it is absolutely vital that we have a Royal Commission that is able to go through systematically and look at how vertical integration has changed the banking sector and whether we can do regulation better, Kieran. We should never be afraid of looking to update our regulations and turn into experts on ways to do that. The Prime Minister is happy to have a Royal Commission when it came to the abuses of the Don Dale Detention Centre to look at systematically how to improve Northern Territory youth incarceration. He shouldn't be afraid of doing the same sort of thing when it comes to improving the quality of Australia's banking sector.

GILBERT: I want to ask you about a few other issues. One is the Malaysia diplomatic incident that erupted quite unusually out of the celebrations from the Grand Prix the other day, the day that Daniel Ricardo won and the nine young men who stripped down to their swimmers. This has seen them put behind bars, a Government source this morning told me that the Government's expectation is they'll get no more than a fine, Labor would welcome that outcome if it does eventuate?

LEIGH: Kieran, as the father of three boys I'm aware that the parents of these young men would be extremely concerned for them and I don't want to say anything that would jeopardise their circumstances. They've done the wrong thing and I really hope that we can get them home soon.

GILBERT: OK, but your take on the behaviour though? Was it a lapse in judgement or just a bit of fun?

LEIGH: Well it was obviously something that deeply offended the Malaysian hosts and I hope that it can be sorted out so those young blokes can go home. Certainly if I was their Dad I would be giving a stern talking to but I'd want to hold them in my arms first.

GILBERT: Finally, the issue of the IMF says that the growth forecasts aren't great moving sideways, does this tell us anything we didn't know the latest IMF outlook is not just for Australia but globally?

LEIGH: Global growth is looking fragile, this phenomenon of secular stagnation is continuing to be a challenge for the world. We're seeing the ructions often caused by politics, you look at the challenges of the United States with 40 per cent chance that Donald Trump will be the next President, in the UK by the self-inflicted wound that is Brexit and some of the re-balancing that is going on in China right now. All of that reminds us in Australia of the importance of having a growth strategy that isn't just relying on trickle-down economics but actually involves investing in low and middle class Australians. Providing great schools opportunity for every kid to go to university and not having the decline in infrastructure spend but a growing infrastructure spend so that we're creating the jobs of the future. 

GILBERT: Are you aware of the comment by former Prime Minister Tony Abbott in the torie conference in relation to a free trade agreement with the UK as we're looking for various paths to boost economic growth and trade. You'd welcome that sort of initiative as advocated by Mr Abbott?

LEIGH: Sure. I mean it makes a difference on the margin. Let's not forget that Australia only trades twice as much with Britain as with the average European Union country. So they are a part of our export story but not a major part. We need to make sure that we're plugging into the services supply chains of Asia, Kieran. The Australia in the Asian Century White Paper that was brought down by the former Government saw all Australian children having the opportunity to learn a priority Asian language. It's those sorts of long-term investments that we need to be making if we're going to set the nation up for the jobs of the future.

GILBERT: Andrew Leigh, appreciate your time this morning.

LEIGH: Thanks, Kieran.


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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.