CHOICE membership

Royal Commission into the Banking, Superannuation and Financial Services Industry





Sounds like the NAB shareholder meeting was a bit of a doozy.




An article regarding proposed changes to Australian superannuation and comments from Choice.


I just realised that I hadn’t looked at this thread in a while…

Given that ASIC’s 2017-18 annual report (PDF, page 127) shows that it received $348m (or less than half of this fine!) in appropriations, it is fairly obvious why it is at a disadvantage compared with the entities it is supposed to police.

Unfortunately, if we want a regulator with teeth we need to fund it - and almost all Commonwealth entities have had their operational funding reduced in real terms for every year since 1986! (Agencies such as the Department of Defence have been largely excluded from the ‘efficiency dividend’ until recent years.) Just to be clear, this does not mean that Commonwealth appropriations have been cut - the cut is applied after indexation - but it does mean that the money available to, for instance, process payments to social security recipients has been cut per recipient in 1986-equivalent dollars by an enormous amount - and without considering whether efficiencies are actually gained or even exist!

Nope. ASIC won’t get a cent of it - it administers that money on behalf of the Commonwealth, and has no control over its spending.

You neglected the option of printing money, as well as a whole range of options for increasing taxation. Of course, governments love cutting taxes - but the big beneficiaries are not Jill and Jack Average but Malcolm Turnbulls and the like. We used to have a progressive taxation system, but it has been gradually regressed to the point where most taxes are paid by the people who can least afford them.

Conservatives love the concept of ‘personal responsibility’ - until it is applied to them (such as in the cases of Barnaby Joyce, Andrew Broad, and so many others who are happy to preach but less happy to practice).

Australia tends to follow US trends. Watch how wages growth here has slowed in recent years as unions and other protections for employee rights are marginalised. Watch how profits grow for corporations while taxes fall.

Capitalism is not a dominant model in most of the world’s economies. Even the largest and loudest ‘capitalist’ economy is working extremely hard to ensure the rich get richer and there remain enough people who need to be wage slaves in order to produce and consume. The term ‘military industrial complex’ was coined as a warning - but has become the reality of the US economy. Most modern inventions were originally funded by governments - including the semiconductor, WiFi, the Internet, GPS is still operated by the US government…

I have often heard people say that the purest form of capitalism was Dickens’ England. This was a country of a few rich, and an awful lot of people struggling to survive every day. Most proponents of capitalism totally ignore the perils of unbridled and uncontrolled capitalism, but at the moment we have something almost as bad - a welfare state for the wealthy. As Warren Buffett keeps stating, it is crazy that a multi-billionaire pays less tax than his secretary - and yet he got another big tax cut last year! Australia’s tax system is similar in its provision of loopholes, deductions, credits, allowances etc. that you can only use once you already have money.

What’s this about ‘don’t do it again’? I don’t think any of the banks have heard that!

So you train your staff in how to behave, provide incentives for them to behave in a particular way, and then when you’re busted they get the blame?

Not knowing the law is no excuse for breaking it. Similarly, an auditor is liable for their audit report of a company’s accounts. There is absolutely no reason why a company’s board and executives should not be held responsible for breaches of law about which they should reasonably have been aware or regarding which a ‘reasonable person’ would have been aware.

Personal loyalty is an anachronistic concept. No large employer today shows any loyalty to their employees - there is absolutely no reason for any employee to show loyalty to such an employer.

Of course not - where was the risk that the bank would get in major trouble for these? As late as 2018 the government was saying that there was no need for a Royal Commission into the banks.


The bear is only tame because of the politicians who appoint to it, direct it and fund it.

This is because banks deliberately set out to be ‘sticky’. As the CBA realised, if you capture the child with a Dollarmite account then you are likely to keep them for life - regardless of how egregiously you treat them, they will adopt ‘battered woman syndrome’ and assume it’s their own fault and there is no escape.

In fact, I would say that prostitutes have a far better moral compass than has been shown by banking executives and business leaders. Prostitutes are renting something over which they have control; bankers are selling things they don’t control or own, and getting paid not for what they have done but for what their underlings have somehow achieved.

So they’ll all be as worried as they were when the Bahamas Papers were published? Plus ça change, plus c’est la même chose.


Apologies for quoting myself, but I realised that I can’t remember which comes first - the indexation or the ‘efficiency’ dividend so wanted to clarify that I’m not entirely sure on this item. (It’s been a while since I had to deal with it.) It makes no difference in most cases - it’s multiplying numbers, so the order doesn’t matter - just a complication when you introduce new funding streams or change existing ones in another manner.


Yet another article regarding the bottom-feeding grubs preying on the most financially desparate members of the community.

How much longer until something positive is done to rein in these loan sharks and protect the most vulnerable people from these loan sharks and themselves by way of some more humanatiriant form of assistance?


Another article regarding the grubby banks and their contempt of customers.

When I was walking past the LPO in our local shopping centre the other day, I noticed a sign in the window advising they would no longer be providing ANZ banking services. Now I know why.


An article regarding AMP taking a hit on their profits and dividents.

Perhaps they could claw back some of the executive bonuses?


The “good news” for the banks just keeps on coming.



Today’s episode.

As stated at the bottom of the article, there will be a 30 minute documentary on ABC News TV today and tomorow.


So to those three questions from the ABC:

  1. Will anyone go to jail? Highly unlikely; corporate law focuses on punishing the shareholder (i.e. large fines against the entity), and while lawyers would love the fees they could charge for defending bank executives it is highly likely that the executives have put enough distance between themselves and their company’s actions to make criminal charges almost impossible.
  2. What will be done about the conflict between consumer and bank interests? The bank will continue to win. I cannot see any government making the reforms necessary to fix this problem, as they would need to ban certain forms of remuneration and the ability for banks to outsource certain functions (such as through mortgage brokers).
  3. How about toughening up the regulators? Well, if anyone believes substantial action will be taken on that front I have a great deal on a bridge. The ABC article points out that the regulators tend to negotiate penalties, and of course this is A Bad Thing. The alternative would be to take banks to court - which would require decent funding (i.e. a lot more than the regulators currently get). Large corporations are happy to spend shareholder money in court, and our regulators cannot beat them without spending taxpayer money on their own legal teams.

So what do we get out of this royal commission? Probably what we get out of most royal commissions that are not created through government policy to drive a particular political agenda. Compare the real world outcomes from the Royal Commission into Aboriginal Deaths in Custody with the outcomes from the Royal Commission into Trade Union Governance and Corruption. One of these resulted in legislation and major government action - the other was about disadvantaged people, and governments don’t really care about them so much.


The present government didn’t want it and said it wasn’t needed as there was nothing to find while the opposition fired from the sidelines and insisted action was needed. It will be interesting to see what the next government actually does about it. There could be:

  • Claytons legislation similar to the federal ICAC bill,
  • a do-si-do where they change places after a circular maneuver,
  • real action.


Oppositions often promise things they don’t intend to do. Promises like our ‘never ever’ GST, or ‘no cuts’, or dozens of other examples from the last decade or two. I think it is clear that oppositions can safely say whatever they want and then divide their promises into ‘core’ and ‘non-core’ if they manage to win power.

In this case I suspect that a Labor government would do a little more than the Coalition - but not much. Both have become subservient to their funding bases and economic rationalism (regardless of the theories behind this having been almost entirely disproven), and in both cases this now includes large business such as the banks they’re supposed to regulate.


And now the vultures are circling the bottom-feeders.


Two more articles regarding the Banking RC.


The disgraceful news just keeps on coming.

The release of the Commission’s final report tomorrow should be interesting reading.


Consumer groups have joined the Banking RC lock up in Canberra today, including @PatrickVeyret, @XavierOHalloran and CHOICE CEO @AlanKirkland. We’re expecting the lock-up to break after 4pm today, and then we’ll be live Tweeting and providing updates here in the Community with all the news.