ABC NORTH QUEENSLAND
WEDNESDAY, 13 JUNE 2018
SUBJECT: Banking Royal Commission.
MICHAEL CLARKE: Last night a forum was held to discuss cases of financial misconduct. It was put together to discuss the issue with the Labor Party and in town at the moment is the ALP's Acting Shadow Treasurer, Andrew Leigh who joins us this morning along with the Member for Herbert, Cathy O'Toole. Good to see you both. Thanks for being with us today. Andrew Leigh, why have a discussion about banking issues in Townsville when there is this Royal Commission underway across the country?
ANDREW LEIGH, ACTING SHADOW TREASURER: Michael, we want to hear directly from people about their stories about how the banks have affected them. We know that Townsville was hard hit by the Storm Financial scandal that not only saw people lose their homes but in some cases, end up with over a million dollar’s worth of debt. That led the last Labor Government to put in place a series of reforms that required financial advisers to act in the best interests of their client. Not a very high bar you'd think! We were surprised when the Liberals and Nationals tried to wind that back when they won office. We then argued for almost two years for this Royal Commission that we finally had. Malcolm Turnbull was telling us it was a stunt and we know it's anything but. We've seen the scandals coming through, dead people being charged for financial advice, one bank playing with kids school bank accounts, the head of AMP having to step down, one in twenty bits of advice the ANZ has given were not in the best interest of the client. And then last night we were hearing a lot of the texture around that and how that's directly affected Townsville residents and the changes that they want to see.
CLARKE: Cathy O'Toole, what did you hear last night? What did people tell you?
CATHY O'TOOLE, MEMBER FOR HERBERT: People were talking about the great distress of the processes that they had gone through with the bank and no actually understanding why processes had been put into place. One gentleman had in a very short space of time, 12 months, 5 bank managers. He was incredibly stressed and he had been into my office so I'd spoken to him before. It was a really great opportunity for people to come and talk openly with Andrew who has extensive knowledge in this area to just make the human impact really clear, it's really strong in our community.
CLARKE: Are these the sorts of thing you've been hearing in your electorate office for a while? Were you surprised at what you were hearing last night?
O'TOOLE: No, not surprised. Since being elected, I think in the first month I had numerous people come in and one gentleman offered to bring in the cartons of information that he had and collected in what happened to him. I've heard the most devastating stories of people that should have never have been put into the position they were put in by banks and they have lost their homes, their livelihood, their jobs. It's just been dreadful. The mental health impact on these people cannot be understated.
CLARKE: Andrew Leigh, with this information, are these stories going to find their way to the Royal Commission as far as you know? What assistance can be given to those stories that you heard last night?
LEIGH: Well there's certainly some of them that have been engaging directly with the Royal Commission but I think it also reminds us of the link between our mental health support services and the need to do right by people who have been ripped off. There was a nurse, Jacqueline McDowell, who said after she had been advised by Westpac to put her life savings into a bed and breakfast and lost everything that she felt humiliated, stupid and embarrassed. You got some of that sense from the conversations last night, people feeling the incredible stress. As Cathy said, I think we can do a better job of marrying up the supports we give to people who are going through these difficult personal experiences with the legalistic processes around getting proper redress.
CLARKE: Are you holding these forums around the country?
LEIGH: We've held a number of them, we held another the night before last in Rockhampton and it's just a really important way of making sure that we have the steps in place to deal with what will fall out from the Royal Commission. Bill Shorten has written to Malcolm Turnbull calling for a national compensation scheme to be set up, funded by the banks. Of course, Cathy and I have been arguing strongly in parliament that this is possibly the worst ever time for Malcolm Turnbull to be saying that the big banks should get a $17 billion tax cut.
CLARKE: Doesn't this go beyond politics though because this process in we're seeing in banking and financial institutions is built up over time and it's almost been a part of culture of governance going right back to the 80s, have allowed to occur. That's my take on it, is that a fair take in your opinion?
LEIGH: Well I think it's a bit unfair when you go back to the differences around the Future of Financial Advice reforms, Michael. Labor introduced those reforms, clearly backed by consumer groups and opposed by the banking sector. The LNP tried to wind them back after winning office. But you do see around the world this challenge of politicians making sure the banks serve the community and that they don't start broadening out into other areas where they end up being conflicted.
CLARKE: But the fact that even the Storm Financial situation could arise in the first place, what responsibility do our leaders play in making sure that something like that shouldn't have happened to begin with?
LEIGH: We have to make sure we have the right sort of rules around it and one thing you've noticed around the world following the GFC has been a move back towards narrow banking. This notion that you want to be careful about banks that do a lot of investing, provide insurance, to provide financial advice. Sometimes those things are better separated. Banks play a critical role in our economy in marrying up savers and borrowers. They need to be able to do that job really well for our economy to function strongly. If they do a bad job of that then small businesses suffer and you have an economy that fails to grow.
CLARKE: And Cathy O'Toole, it's interesting that Andrew Leigh mentions narrow banking at a time when North Queensland is seeing more bank branches closing, certainly in smaller communities outside of Townsville, that's become a real issue but also in Townsville itself. A number of the branches that people have gone to for years are no longer there, it's long distance travel to get to your local bank, should that be changed? What's your opinion on that?
O'TOOLE: I've had a lot of people ring the office about that, and it has created stress. You rightly mention that it's really difficult if you live in rural Australia and of course we're surrounded by rural communities.
CLARKE: Not even rural, places like Ingham now are seeing a real struggle getting to the bank.
O'TOOLE: They are. As you say people locally, particularly for our pensioners or people on Newstart or Disability Support Pensions where the cost of transport is real to them. Where they used to be able to go and do all of their shopping in one place, and go to the bank and do all those tasks now they can't. These are economic decisions that the banks make but I think we need to be more thoughtful about the structure of our communities and some sort of corporate responsibility that these large corporations have. If you can expect to get a $17 billion tax cut, surely you can be expected to provide services to people in communities. Particularly in Queensland, and when you look at Townsville being the largest city in Northern Australia, surely we have a role to play in the development of Northen Australia and having those services available for our community members is absolutely essential.
CLARKE: Talking about that issue of banking, it was a forum that you did put on last night, people did share their stories and more stories I'm sure we'll hear as the Banking Royal Commission continues. Thank you for your time this morning both of you.
LEIGH: Thanks, Michael.
O'TOOLE: Thank you, Michael.
Authorised by Noah Carroll ALP Canberra