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Thursday, 29 May 1997
Page: 4068


Senator MURPHY(8.36 p.m.) —I would like to raise some matters relating to our banking industry. What I want to say essentially relates to a Four Corners program that dealt with a number of issues on how the banks have treated their customers, particularly small business customers and farmers. The issue I want to go to principally is foreign currency borrowings and the fact that it has been assessed that one bank alone retained potentially some $300 million, as I understand it, of its customers' money that it illegally took. The ANZ Bank has been caught out in respect of this particular question.

The withholding tax is a tax that is to be paid by the bank on interest earned on money it has loaned to an Australian customer—be that customer a farmer, a small business person or whoever. The bank was supposed to pay that tax, but it actually put that tax on top of the charges—the interest charges, et cetera—it was making its customers pay.

As I said, the ANZ Bank were caught out, and the court has ordered them to pay. They have admitted that they deducted in excess of $30 million in withholding tax from their borrowers and kept it for themselves. They did not pay it to the tax office. They then said to their customers, `You can have it back.' But the problem with that is that many of the people they did that to had suffered dramatically. They had lost either their businesses or their farms as a result of those actions. It was a little late to say, `Sorry, you can have it back.'

The government talks about interest rates being so important—and they are; there is no doubt about that—but we ought to have a long hard look at the issues that relate to these sorts of practices within the banking industry. It is my intention to take this to my party room with a view to looking at whether or not there is a capacity, either through legislation or through some of the committee processes within this parliament, to have a long hard look at these banks and the activi ties they have been involved in. These activities are unacceptable, because if other people did the same thing—as was pointed out during the Four Corners program—they would be in gaol.

Although I have only a very short time to speak, I think this is a fundamental and important issue and I will come back into this chamber on another occasion and raise this matter further, because it is unacceptable that in Australia we can have banks carrying out these sorts of activities. Can I quickly say that, earlier today in the debate about the disallowance motion on regulations relating to—(Time expired)