The Senate today passed a motion calling for the establishment of a royal commission to inquire into misconduct in the banking and financial services industry.
The motion was moved by the ALP leader in the Senate, Penny Wong. After five minutes of discussion, it was passed on the voices.
The motion was similar to one rejected the day before by the House of Representatives.
The motion requested the concurrence of the House. When it was presented to the House later in the day, the government was outmanoeuvred by the Opposition in a series of votes. The absence of Coalition MPs meant that the government lost control of the House for nearly two hours.
- Listen the the Senate debate (5m – transcript below)
- Watch the debate (5m)
Hansard transcript of Senate debate on the Banking and Financial Services motion.
Senator WONG (South Australia—Leader of the Opposition in the Senate) (12:25): I move:
That—
(a) the Senate notes that:
(i) confidence and trust in the financial services industry has been shaken by ongoing revelations of scandals, which have resulted in tens of thousands of Australians being ripped off, including:
(A) retirees who have had their retirement savings gutted,
(B) families who have been rorted out of hundreds of thousands of dollars,
(C) small business owners who have lost everything, and
(D) life insurance policy holders who have been denied justice;
(ii) it is clear from the breadth and scope of the allegations that the problems in this industry go beyond any one bank or type of financial institution,
(iii) the Australian Labor Party, the Australian Greens, crossbench, Liberal and Nationals parliamentarians have supported a thorough investigation of the culture and practices within the financial services industry through a Royal Commission, which is the only forum with the coercive powers and broad jurisdiction necessary to properly perform this investigation, and
(iv) Australia has one of the strongest banking systems in the world, but Australians must have confidence in their banks and financial institutions, making it necessary to sweep away doubt and uncover and deal with unethical behaviour that compromises that confidence;
(b) the Senate calls on the Prime Minister to request His Excellency the Governor-General of the Commonwealth of Australia issue Letters Patent to establish a Royal Commission to inquire into misconduct in the banking and financial services industry, including their agents and managed investment schemes; and
(c) this resolution be communicated to the House of Representatives for concurrence.
Notice of motion altered on 31 August 2016 pursuant to standing order 77.
Senator WILLIAMS (New South Wales) (12:26): I seek leave to make a short statement.
The PRESIDENT: Leave is granted for one minute.
Senator WILLIAMS: Yesterday, I tried to amend this motion to include the life insurance industry and the insurance industry.
Senator Wong interjecting—
Senator WILLIAMS: Senator Wong, if you will listen—
Senator Wong: I am listening.
Senator WILLIAMS: Well, you should go and review the Four Corners/Fairfax story of Adele Ferguson on the wrongdoings.
The PRESIDENT: Address your comments to the chair, Senator Williams.
Senator WILLIAMS: I am sorry, Mr President. Have a read of the story about REST industry super fund and what it has done with the case of a deceased young fellow who would not have had his claim paid. That is why I am moving to have life insurance in this and to have an inquiry into that very issue. I have crossed the floor before. Senator Dastyari is aware of that. You would not come with me in June last year—the 24th, I think it was—Senator Dastyari; probably you were lacking leadership from Beijing or something and that is why you would not join me in that appeal. For years I have stated where I stand on this: I want a royal commission. But let us have a proper royal commission not a cover up royal commission. That is the point I make and that is why I will not support this motion now.
Senator McGRATH (Queensland—Assistant Minister to the Prime Minister) (12:27): I seek leave to make a short statement?
Senator Wong: Before we grant leave, is this the last from the government?
Senator McGRATH: I cannot speak for other senators, but I on behalf of the government—
The PRESIDENT: Order. Leave is granted for one minute.
Senator McGRATH: The government does not support a royal commission into the banking and financial services sector, because a royal commission would not benefit consumers or the Australian economy. Whilst the government has proactively sought to reform Australia’s financial sector, Labor when in government sat idle and oversaw scandal after scandal. In fact, most of the notable scandals and collapses happened on Labor’s watch, when the Leader of the Opposition was the Minister for Financial Services and Superannuation, including financial planning scandals at the Commonwealth Bank and Macquarie and the collapse of firms such as Trio Capital, Storm Financial and Great Southern. Labor was in government for six years and did not act. Our government has acted. We have delivered the Financial System Inquiry and a stronger regulator with more resources and powers, and we are working on a one-stop shop for consumer complaints.
Senator GALLAGHER (Australian Capital Territory) (12:28): I seek leave to make a short statement.
The PRESIDENT: Leave is granted for one minute.
Senator GALLAGHER: Just in support of this motion and in response to Senator Williams, I say that we are joined today in this place by a number of victims of bank scandals—victims of the financial services industry. I have just spent an hour with these people—they join us here in this chamber—listening to how their lives have been affected and to how they seek the response that only a royal commission can give.
Senator Williams interjecting—
Senator GALLAGHER: And only a royal commission that you, Senator Williams, have been arguing for, for some time. The response from the government has been completely inadequate. Listen to the stories of those people whose lives have been affected, whose houses have been lost, whose retirement savings have vanished, whose businesses have folded and who have been arguing for years—eight to 10 years, for some people—for some sense of justice. This is what this motion seeks and that is what a royal commission will find.
Senator WHISH-WILSON (Tasmania) (12:29): I seek leave to make a short statement.
The PRESIDENT: Leave is granted for one minute.
Senator WHISH-WILSON: Under the Constitution, the Australian government has responsibilities for the regulation of both banking and insurance. I want to point out to the chamber and especially to you, Senator Williams—I first, of course, recognise that you have called for a royal commission into financial misconduct for some time, and I respect that—that the banks are now vertically integrated. If we have an inquiry into the banking system, that includes the insurance markets. Most banks own financial services companies, including insurance companies. So the motion put by Labor I support, because it will encompass the areas of your concern. As far as forestry managed investment schemes go, those of us who were on the inquiry who recommended for a royal commission—that would also encompass the banking system, because the banks finance the finance companies and places like Timbercorp. They are all included. I would urge you to support this motion today.
Question agreed to.
