Four pillars and financial advice policies should be left alone - The Drum ABC 1

This evening I appeared on the ABC's The Drum program to argue for the retention of two Labor initiatives; strong pro-consumer financial advice laws and the four pillars banking policy. Here's the transcript: 




SUBJECT / S: Future of Financial Advice reforms; Four pillars banking policy; ALP 2013 election campaign review.

PRESENTER, ELEANOR HALL: Let me first go to the issue of the financial advice laws because we have a situation where the Government is actually, as your Shadow Treasurer put it earlier today, capitulating on the issue of commissions. Can you tell us whether Labor will now back those financial laws through the Parliament?

SHADOW ASSISTANT TREASURER, ANDREW LEIGH: Well, we're certainly not inclined to back things that are not in the best interests of consumers. I think the best way of understanding this pretty technical area of policy is to look at who is on which side. The bankers are pushing for them, Council of the Aging, National Seniors and Choice are against them. 


This is a reform that would be good for bankers and bad for pensioners, and after a generation of rising in equality I think that’s the last sort of thing Australia needs.

HALL: So, will Labor be voting it down?

LEIGH: We are not going to support the taking away of the best interests duty. We are not going to support measures which don't see customers being able to be told what they're being provided. This is an instance in which there's a huge disparity in the information people have. Just as when you see your doctor or lawyer, you want to know that they're acting in your best interests. I think that is not unreasonable to expect when you go to see a financial planners. 

I do sometimes wonder where Joe Hockey comes from on these sorts of things, whether he has actually put himself in the shoes of a vulnerable pensioner who doesn't have the same sort of financial knowledge that he has. The old golden rule that you should treat others as you expect yourself to be treated doesn't seem to be the principle on which this Government makes decisions.

HALL: Let's go to the issue of the banking negotiations. The Trade Minister says it is a massive union beat-up. Your response?

LEIGH: The four pillars policy has been in place for a quarter of a century now, going back to 1990. It essentially says that the four big banks - Commonwealth, Westpac, NAB and ANZ - aren't allowed to merge. That served us extraordinarily well. When the greatest world crisis since the Great Depression hit, our banks came through unscathed and you can't say that for many developed countries around the world. Labor built the four pillars policy and we will be standing by it. We would like some reassurance from the Government that while they're ostensibly carrying out a financial systems inquiry, they're not, through the back door, trying to dismantle a fundamental plank of that policy.

HALL: Well has Lyndal [Curtis] pointed out, the Minister has said, ‘Yes I agree, we with have a world class banking system. Why would I do anything to jeopardise that?’.

LEIGH: Yes, but I would like to see an assurance from the Minister that the four pillars policy stays and they're not negotiating away the four pillars policy. Because, like Nathan [Rees], I believe in competition in  the banking sector and I don't think that is well served by allowing the big four to merge. That give us greater market concentration at a time when already our big four banks have significant market shares.

HALL: Now when Labor was in Government you were in fact conducting these negotiations and you seemed to be perfectly happy about it. Why do you have an issue now the Coalition is in Government?

LEIGH: I don't want to comment on the WikiLeaks documents but certainly what we are talking about is negotiations being carried out under the Coalition which are putting the four pillars policy on the chopping block. Labor wouldn't have done that. We wouldn't have traded away the four pillars policy. We believe it's fundamentally good for consumers to maintain that separation between Australia's biggest four banks.

HALL: The Minister is saying that it's a beat-up to say they're trading away the four pillars policy and he wants to open up the system to greater competition. Is there really a problem with that?

LEIGH: I am for banking competition and if that is what the Government is doing, that's fine. But I’d like a reassurance they are not going to the opposite direction. Because so often with this Government you see them backing the big end of town over the little guy. We have seen that in a plethora of decisions in the Budget; giving $50,000 paid parental leave to millionaires while taking away unemployment benefits from twenty-somethings in high unemployment areas. I worry that in an area like this, this is the kind of Government that could well put the interests of the big end of town ahead of the interests of mums and dads in suburban Australia.

HALL: Just on another issue, the Federal ALP Vice-President has released the report that the party has made into the 2013 election campaign. There's a lot of talk of acrimony and disunity. I guess that is not a surprise. Any surprises in there at all for you?

LEIGH: I thought it was a warts-and-all review. And I’m actually really pleased to see Labor having an honest conversation about where we went wrong. We're a party that is the oldest political party in 

Australia and we haven't stayed around for 12 decades by being secretive and not learning from our mistakes. This report which talks openly and honestly about the mistakes that we made in that electoral campaign. I think it’s a really important step towards rebuilding Labor and making sure that we're competitive in the 2016 election. Australia demands no less.


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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.