THE HON BILL SHORTEN MP
LEADER OF THE OPPOSITION
MEMBER FOR MARIBYRNONG
WEDNESDAY, 20 APRIL 2016
SUBJECTS: Royal commission into banking and financial services; Labor's plan for fair and sustainable superannuation; Labor's positive plans to put people first; ASIC
TANYA PLIBERSEK, DEPUTY LEADER OF THE OPPOSITION: Thanks very much for coming out to Surry Hills this morning. It's my pleasure to welcome Bill Shorten, the leader of the Labor Party to my electorate. We've just been meeting with the Financial Services Legal Centre here in Surry Hills. This is a fantastic community legal centre that gets about 26,000 calls a year from people who are distressed because they've been given poor financial advice, they're in debt, they don't know how to repay the debt. Sadly, this legal centre's actually had $160,000 funding cut. They're going to be losing solicitors soon. They're going to be able to give less advice to people who are desperate in the community in future because of the Government's community legal centre funding cuts. Now this is just a tiny piece of the story about the financial stress that Australians are in because of poor practices that financial institutions have engaged in. Bill's going to say a few words now about the more general issue.
BILL SHORTEN, LEADER OF THE OPPOSITION: Thanks Tanya, and good morning everybody. I'd just like to acknowledge that I've been meeting with victims of banks and financial institutions and listening again to the all too familiar stories of people being ripped off. Australia needs a Royal Commission because nothing else has seemed to work to change the culture of banking, and there are tens of thousands of Australians on an annual basis being ripped off. Mr Turnbull has a chance to show whose side he's on. Is he on the side of the big banks or on the side of consumers, millions of consumers? It would appear Mr Turnbull has chosen big banks over consumers today with his desperate announcement to do anything but have a Royal Commission. Mr Turnbull has to explain to the victims of financial frauds, to the victims of poor banking culture, why he is so desperate not to expose the truth in banking. Now, banks are very powerful institutions and they play a very important role and we want to have the best possible banking sector, but when an individual consumer has a complaint or a concern it's a David and Goliath like struggle, especially when they've been ripped off. What levels the playing field for consumers and customers for the big banks of Australia, is the truth and nothing less than the truth will suffice, and the best way to get to the truth about the extent of widespread problems in the banking industry is to have a Royal Commission. Truth is the missing ingredient in terms of reform in the banking sector. A Royal Commission will deliver the truth and that's what tens of thousands of Australians who've experienced adverse treatment at the hand of banks and financial institutions deserve. Mr Turnbull today has sold out Australians in favour of the big banks. His proposed Clayton’s announcement is merely restoring cuts that they made and the only people who'll be cheering today's announcement will be the big banks of Australia. I'd like to get one of my Parliamentary Secretaries, Ed Husic, who's a part of our financial-economic team to talk further about some of the specific issues.
ED HUSIC, PARLIAMENTARY SECRETARY TO THE SHADOW TREASURER: Thanks Bill and thanks Tanya. I want to make one thing crystal clear: Labor has proposed a Royal Commission to get answers, solutions, relief for people who experienced financial hardship as a result of bad advice and bad treatment. We proposed a Royal Commission to get answers. Today the Government's announced $120 million worth of hush money. You are not going to get answers, solutions, relief out of what the Government's put today and the next thing I'd ask you to consider is do you really seriously believe that the Turnbull Government, in the absence of a Royal Commission being proposed by Labor, would have magically stumped up $120 million to help get answers to the type of problems and the type of pressures that the people we've met today have faced and thousands of others across the country? The answer is no. What he has delivered today is not a solution it's a political Band-Aid and it's not good enough and frankly the only thing that is going to cut it now is a Royal Commission.
SHORTEN: We're happy to take questions.
JOURNALIST: Mr Shorten, why are you so keen on having a Royal Commission now and not when you were Financial Services Minister?
SHORTEN: Well, clearly, every time there's been a scandal the banks have said, ‘We’ll do something and we'll fix our ways,’ but the scandals keep coming. And in the last 12 months we've seen a large bank provide insurance products and then when people who've bought these products in good faith and in trust seek to claim upon them, we found the active conspiracy to defraud people and deny them their justice. We've also seen the most serious allegations and investigation of two of our four big banks so far into rate rigging. Enough is enough. We've hoped that the banks would improve, we've tried legislative mechanism after legislative mechanism but the problem isn't just the law, the problem here is the culture of banking and financial services in this country. There's a culture of unaccountability and arrogance and what happens is at the same time you've got more and more people who are being cornered, who've got complaints, we're seeing irresponsible lending even though that was meant to stop. We see problems in the payday loan sector, even though that was meant to be stopped. We see examples - there's 100 calls a day plus that this overworked financial legal services centre is receiving, that's 100 of our fellow Australians a day. Something needs to change. Using business-as-usual solutions, just hoping that the regulator, which in itself has been cut and underfunded, hoping the business-as-usual is going to change the volume of concerns and rip-offs would be an act of hope over experience. We need to do a game changer in financial services banking in Australia. So, the Labor Party is seeing this Royal Commission as a last resort but I tell you what, anything less than that is going to see more people in the future be ripped off and that's what we desperately want to stop.
JOURNALIST: So, do you think that those issues were only around now and not when you were Financial Services Minister?
SHORTEN: This is the Government. They always want to talk about the past. I'm focused on the future. You've talked - two years ago one of the big banks narrowly missed a Royal Commission but there were going to be undertakings for things to change. The banks have said and there's been pressure mounting for a Royal Commission for some years and the banks and financial service industry leaders say, ‘we get the message, there's no need for a Royal Commission’. Well, the Labor Party's ran out of patience with our banking and financial services sector. We say enough is enough and Mr Turnbull can have a Royal Commission now and not make this a political issue at the election but instead, you can see Mr Turnbull's fingernail marks being dragged across the concrete of Parliament in Canberra where he desperately wants to do anything except see the truth shine through in the banking and financial services sector.
Any other questions?
JOURNALIST: What is your response to the Government's - reports about the Government's plans for taxing super contributions which would raise four times as much as yours?
SHORTEN: Now the Government is trying to have some sort of competition to out-Labor Labor. It is not going to cut the mustard. Labor's been leading the economic debate in this country from Opposition. We've said all along that there are unsustainable tax concessions at the top end of superannuation, unsustainable tax concessions. Now we think, and we'll study the Budget carefully, we think it is the right way to go to close down some of the unsustainable tax concessions but I find the Government's last-minute conversion to this a trifle interesting. Last year when we proposed this, the Government was absolutely out the door, bagging us up hill and down dale. Now they realise that Labor was right, and they should follow Labor's lead on making multinationals pay their fair share, and they should follow Labor's lead on the reform of negative gearing, and they should follow Labor's lead on stopping wasteful Government expenditure, and they should follow Labor's lead on stopping paying this baby bonus which no-one asked for. They should stop wasting money on a Tony Abbott-Malcolm Turnbull Emissions Reduction Fund which pays big polluters for poor environmental outcomes. And if they're so keen to save money they should skip the plebiscite on marriage equality and have a free vote in Parliament in the next week of Parliament.
JOURNALIST: On the user-pays model for the extra ASIC funding, what do you envisage in terms of who will bear the cost? Is that a price that the consumer will have to pay? Will the banks shift the $120 million on to the end user?
SHORTEN: If you're asking me 'do I think that if the banks are being required to pay something, will they pass that the cost on to the customers?', they could well. The real issue here is why is Mr Turnbull so desperate not to have a banking Royal Commission? Why has Mr Turnbull gone to the banks and said, ‘listen, I have cut $120 million from ASIC, if you give me $120 million then we can try and brush off the calls for the Royal Commission.’ We can't have business-as-usual in the Australian banking and financial services sector. If just funding ASIC was going to stop the problem, then we wouldn't have the problems we've currently got. No, it's not enough.
The truth of the matter is asking the regulator to investigate themselves isn't going to fix anything. What we need is a proper examination of the widespread health of the banking sector. Australians know that even though we live in a period of low cash rate, they haven't seen credit card interest rates track downwards the way we've seen mortgage housing rates track downward. We see irresponsible lending practices. We see practices in the insurance industry where it almost seems systematic organisation to deny people legitimate claims. No, the banking and financial services sector has got to stop thinking that somehow that they're immune from public opinion.
The Liberal Party needs to choose the people, it needs to put people first or the banks first. I predict that the banks may have their mutterings and complain about having to pay some money to pay for ASIC but I tell you what, they'll be popping champagne corks tonight that Malcolm Turnbull isn't pushing them on a royal commission but we will not let this issue go. And of course, we've hoped in the past that the banks would lift their game but enough is enough. When you listen to people I had the privilege of listening to today, people at the ages of 50 and 60 who have lost their money from being put into inappropriate or unfair financial products, people at age can't just start again. We need the banking sector to put people first just like the Labor Government will.
JOURNALIST: Isn't the Government right though that a Royal Commission will just be protracted and political?
SHORTEN: Not at all. What the Government is trying to say is let's do business-as-usual. Let's do business-as-usual. What a lazy, pro-big bank response from this Government. All they've said today is that they're going to reverse the cuts that they made. The banks will be wiping the sweat from their brow with relief that Malcolm Turnbull hasn't picked the people over the banks. The problem is Labor is not going to let go of this Royal Commission issue. The more you talk to victims of financial malpractice, the more you realise that banking itself has to see, experience the truth of a Royal Commission. A Royal Commission is the king of Government inquiries. It can get to the bottom of the matter, it can get to the heart of the matter in terms of the facts about whether or not there is a culture of arrogance, if there's a culture of putting money first and people second.
Last question if there is one. Great, thank you.