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Wednesday, 21 April 1999
Page: 4078


Senator FERRIS (7:20 PM) —Tonight I would like to tell a story about a bank. `Which bank?' you might ask. I refer to a bank that was once known as the people's bank, a bank described by its founding father, Prime Minister Andrew Fisher, as a bank belonging to the people. Most of us have quite nostalgic memories of our little tin moneyboxes and our school bank accounts. In those days, the Commonwealth Bank was a community icon—a safe and secure repository for our savings and a part of the very important lesson about saving for a rainy day.

Over the years, the bank has grown and changed, as indeed has the Australian banking industry. But always the Commonwealth Bank continued to be a bank for the people. In fact, in 1993 it claimed, very proudly in its annual report, that it operated responsibly `according to commercial principles with industry related performance objectives'. Its mission statement proclaimed that it aimed to be `a preferred provider of financial services to customers, helping them realise their goals'. However, what we now know is that the goals that could be realised varied from customer to customer.

For many of the farmers of Australia, those wealth generators of this nation, the bank had a policy under the high interest rates forced upon all of us by the Hawke and Keating governments. I have no doubt that those hundreds, perhaps thousands, of farm families will never forget the way the Commonwealth Bank dealt with their particular goals and aspirations. Right across this country the Commonwealth Bank sold up, threw off, evicted, auctioned, foreclosed and bankrupted hundreds of farming families. Their problem was that they simply could not meet the Commonwealth Bank's demand for payment.

Who could ever forget those televised scenes of forced sales with court officials dragging families out of their farmhouses, their belongings callously abandoned and their dignity totally disregarded. Let us recall a couple of them. There was Oswald, a 70-year-old Victorian war veteran, who was evicted from his soldier settlement farm because the Commonwealth Bank decided to call in his $½ million debt which had accumulated as a result of floods, poor seasons and, most of all, high interest rates. Another was Robert, a farmer who borrowed $120,000, a debt which eventually blew out to $½ million as Commonwealth Bank interest rates reached 22 per cent. He was forcibly sold up by the bank when he was unable to pay the bank the demanded $275 a day required to cover his debts. So this was how the Commonwealth Bank helped those farmers `realise their goals', and there were hundreds more of those tragic stories across this country. But not for every customer.

The Commonwealth Bank provided special deals for some very special customers. This afternoon the Senate heard how the Commonwealth Bank did some very special favours for another well-known farmer, favours which enabled him to pocket millions of dollars when he sold his farm, even though his property, a piggery, was also in debt to the Commonwealth Bank. It was not hundreds or thousands of dollars in debt but in fact millions of dollars in debt.

Farming Keating claimed that his farm was a `first-rate asset'. We now know that it was not. I seek leave to table a 1995 report by KPMG, which in paragraph (vii) declared that the Euphron group of companies could only continue to trade with the support of the group's shareholders and bankers.

Leave not granted.


Senator FERRIS —How interesting that leave is not granted. Why don't these people want to know the truth about this matter? But the Commonwealth Bank came to the rescue for this high profile farming Prime Minister—no doubt with its corporate mission statement in mind of helping customers to realise their goals—and it was a pork-barrelling exercise that would do a pig farmer proud. In a deal that would sicken the stomachs of thousands of hardworking, honest farm clients around this country, the Commonwealth Bank wrote off nearly $5 million of this pig farm's debt. I now seek leave to table a document which shows that in May 1994 the Commonwealth Bank did write off $4.9 million of the piggery group debt.

Leave not granted.


Senator Chris Evans —Madam President, on a point of order: I just want to put on the record that the opposition reminds government senators there are courtesies involved in tabling documents. If they do not observe the courtesies, they will not be granted leave.


Senator FERRIS —In this case the bank silently wrote off the debt at the same time as the sale to Indonesian interests was taking place. In doing so, it allowed the multimillion dollar purchase price to flow to Farmer Keating without any claim by the bank. In summary, this extraordinary write-off, favour, gift or special deal for the Prime Minister was worth millions of dollars—in fact, almost $5 million.

To put that into perspective, that year the Commonwealth Bank wrote off $26.5 million across the agriculture, forestry and fishing industries, mostly after the borrowers had been bankrupted and thrown off their farms. So Mr Keating's write-off accounted for almost one-fifth of the total debt written off, despite the fact that millions of dollars were on their way from Indonesia. There is little doubt that Farmer Keating was the only primary producer offered this gold plated financial deal.

But there was more. The Commonwealth Bank took a second dip into the pork barrel, and it was equally generous and quite extraordinary. Keating and his partner wanted to maximise their take-out of the final settlement of the sale of their shares and Keating's option to the Indonesians. So at final settlement over the Anzac weekend in 1996 the bank came to the party again, this time with a gift worth almost $4 million to enable a successful sale. The gift was in the form of a six-year, no-interest loan which the bank granted the Indonesian purchasers at final settlement.

On the same night that the bank did this deal, Farmer Keating walked away with more than $2 million as his final settlement. Not a bad consolation prize for a man who had been totally rejected by the Australian people only a couple of weeks before! Could any other of Australia's hardworking, wealth generating farmers get this special deal of a six-year, no-interest loan? Not likely. For the hundreds of Australian farmers who were thrown off their properties by the Commonwealth Bank, Farmer Keating's overflowing pork barrel must be sickening.

Recently, 60 Minutes posed the question of whether the bank and Keating conspired to blackmail Al Constantinidis to buy his silence about the piggery deals. It established that the bank settled its $11 million plus action against Constantinidis for $½ million. There is no doubt that Farmer Keating was a significant beneficiary of this decision, which until very recently bought silence from his former partner and, of course, was intended to buy his silence permanently.

So there we have it: a barrel of pork containing special deals worth $20 million. It is enough to make Andrew Fisher turn in his grave—`a bank belonging to the people' indeed. Today, the Commonwealth Bank denied any wrongdoing, but standard denials by press release are no longer enough. The taxpayers and the farmers of Australia want to know why the Commonwealth Bank wrote this money off, they want to know who made the decision, and they want to know now. Pig farmer, Prime Minister, gold plated customer P.J. Keating must surely have been the only farmer in Australia who successfully and silently negotiated a $20 million gift from one of Australia's great public institutions—the Commonwealth Bank of Australia.


Senator O'Chee —Madam President, I rise on a point of order. During Senator Ferris's contribution, Senator Evans, by point of order, indicated that leave had not been granted for the tabling of the document sought by Senator Ferris on the basis that the courtesies of the chamber had not been observed. The courtesies had been observed and, therefore, I am asking by point of order whether that means—because they are the same documents I sought to table earlier today—that the Labor Party is now willing to grant—


Senator Chris Evans —We did not know that.


Senator O'Chee —It was indicated. Does that mean you are willing to grant it?