What would happen if the big four banks controlled your super?
A Parliamentary committee led by Coalition MPs, previously referred to as “a friendly cup of tea and a chat”, has had strong words to say about big banks, but words are all it is.
Liberal and National MPs ‘slammed’ the big four banks for failing to fire any executives after a series of financial scandals.
A report issued by the Standing Committee on Economics was highly critical of the “oligopoly” of the big four banks and the “poor compliance culture” of banks that “repeatedly failed to protect the interests of consumers”.
“This is a culture that senior executives have created. It is a culture that they need to be held accountable for,” said committee chairman Liberal MP David Coleman.
The report was the result of a Coalition-led three-day hearing into the financial sector, which was held by the Government in place of the royal commission proposed by Labor and the Greens.
According to The New Daily, Australians are angry at the banks’ record profits, delays in passing on rate cuts to customers and a series of other banking scandals. There has been much public support for a royal commission, and there may even be more, especially after a hearing which has been characterised by the Finance Sector Union (FSU) as the equivalent of “calling bank bosses to Canberra for a friendly cup of tea and a chat”.
Labor says the report fails to deliver and called the whole process a “stage managed circus”.
“This inquiry was established by the Government to avoid a royal commission into Australia’s banking industry,” wrote Labor MPs.
“This inquiry has confirmed that the big four banks enjoy a cosy and privileged position in Australian society, making large profits off the back of the kind of implicit (and explicit) taxpayer support other businesses can only dream of,” wrote Greens MP Adam Bandt.
“We need a royal commission to take a long hard look at Australia’s banks’ financial [planning] sector and make recommendations about proper reform,” said FSU National Secretary Julia Angrisano. “But instead of a serious inquiry Malcolm Turnbull has established a toothless tiger that won’t result in the changes banking and finance workers and customers desperately need.”
Luckily, the big four banks don’t enjoy ‘oligopoly’ status when it comes to super although, for years, the banks have lobbied for policies to give them the same market share in super that they have in retail banking.
David Whiteley, Chief Executive of Industry Super Australia said the report’s findings were a “stunning rebuke of the banks’ efforts to redesign super to suit their business models”.
“Fortunately for Australian workers and retirees the banks don’t have oligopoly status in superannuation, with not-for-profit funds including industry, public sector and corporate funds having a superior track record when it comes to governance, performance and member focused culture,” said Mr Whiteley.
“The only thing standing between the savings of millions of Australians and a bank-owned fund oligopoly in superannuation is not-for-profit super funds, overseen by representative trustees.”
When it comes to superannuation policy, Mr Whiteley hopes that the Government will not give the banks “a leg up”.
"Everyone knows what will happen when the banks get hold of their super.”
The last time Australia had a royal commission into banking was in 1936-37, do you think it’s time the big banks were hauled in for a ‘reset’? Would you be comfortable with the banks having more sway when it comes to superannuation policy?