Banking Misconduct

06 April 2016


SUBJECT/S: Banking Misconduct

STEVE CHASE: Jim Chalmers, the comments of the Prime Minister are ones, I assume, that the Labor Party would be in pretty full agreement with?

JIM CHALMERS, SHADOW MINISTER FOR FINANCIAL SERVICES AND SUPERANNUATION: Well there are some serious issues and problems in the banking sector which won't be fixed by the weasel words and the waffle of the Prime Minister. It is true that the banks need to do more to ensure that the financial system is working for Australians and not against them. And all of the incidents in recent years have shaken confidence in the banks and that's a problem for them and also a problem for the broader economy.

CHASE: How can you characterise them as weasel words and waffle when he goes into Westpac on its 199th anniversary, tells them to lift their game, basically, broaden their culture away from being motivated by profit and higher salaries?

CHALMERS: Well these issues have been known for some time, whether it's the issues in financial advice, whether it's the issues in life insurance and now the allegations around manipulating the bank bill swap rate. We haven't heard enough from the Government over recent years about these issues. I don't think many Australians would think that Malcolm Turnbull is best placed to stand up to the banks. What we need to see is a properly-funded, properly-resourced regulator, in this case ASIC, doing the work, getting to the bottom of these issues and making sure that Australians can have confidence in the system. But for too long now, the regulators have been underfunded, they don't have the resources to do their job. So I don't think that one speech from the Prime Minister at a party to celebrate the birthday of one of the banks is sufficient to get to the bottom of these issues.

CHASE: Are you suggesting he is compromised because in a former life, he was a merchant banker?

CHALMERS: I'm making the observation that Malcolm Turnbull is not necessarily considered to be someone who stands up for ordinary people against wrongdoing in the corporate world. I think that would be a conclusion broadly shared in the community. On the Labor side, we think that the banking system should work for people, that people should be put first, that they need to have the confidence that the products they are buying are worth the paper that they're written on. I don't think a lot of people would come to the conclusion that Malcolm Turnbull has the same interests at heart.

CHASE: Well, a lot of the things that the banks are alleged to be involved in would have been going on under the former Labor Government as well. It would appear that nothing was done at that time, and it continues now.

CHALMERS: Many of these allegations and many of these claims have come to light in the last year or two. It's certainly true that Governments of all persuasions can do more to ensure that the regulators have the powers and the resources they need to get to the bottom of these very serious issues. But when you're talking about things like life insurance, those allegations came to the fore very recently and these issues around the bank bill swap rate. I'm making the very simple point that not a lot of Australians would think that Malcolm Turnbull is the best placed to deal with these sorts of issues. The first step is to make sure that our regulators have the resources they need to get to the bottom of it and then we can make a judgement about what needs to happen next.

CHASE: As you know, for decades corporations have been using legal means to ship money around. It's all very well for the Labor Party to complain about this, but if it's legal, I suppose the challenge for you is to actually close the loopholes and change the law.

CHALMERS: That is the challenge for the Parliament -- to make sure that our tax arrangements do what they can to minimise the practice that does Australians out of many billions of dollars of tax revenue which would otherwise go to our schools and our hospitals. Labor has a more robust policy when it comes to multinational tax evasion. The Liberal Party have gone soft. They like to talk about being tough on multinationals but the reality is very different. One of their first acts in Government was to water down one of Labor's very sensible proposals to begin to address this problem. Australians are filthy, right around the community, right around the country, at the practice of some companies which means they pay no or very little tax in this country. They don't understand why we can't have more robust laws. Labor wants more robust laws, the Liberals have gone out of their way to water them down.

CHASE: Jim Chalmers, thanks for giving us the views of the Opposition this morning.

CHALMERS: Thank you very much, Steve.