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Wednesday, 27 June 2018
Page: 4206

Senator GEORGIOU (Western Australia) (18:34): I begin by saying that the One Nation-led Senate inquiry into rural lending was the catalyst for the current banking royal commission. The One Nation-led inquiry uncovered unconscionable and dishonest conduct by banks and by receiver managers. We heard stories of farmers having their interest rates raised by up to 80 per cent, and receiver managers charging them over $500 an hour to act on their behalf. In one case, we heard testimony from a Western Australian farmer who had been charged over $500,000 just to sell his sheep and his grain crop, which were worth about the same value. The entire proceeds from the sale were taken by the bank's receivers. This is nothing short of legalised theft.

There have been over 17 government inquiries into bank misconduct recently, and concerns about misconduct and regulatory failures have been the common theme. When the One Nation-led Senate report was tabled last year, Pauline Hanson called for a banking royal commission. The Turnbull government rejected these calls, saying that a royal commission was not needed as they had acted to clean up the industry. I raised this issue in this chamber last November, asking Senator Brandis:

When will the Liberal Party and the Prime Minister wake up … and hold a royal commission on the banks?

Senator Brandis replied:

The problem with a royal commission is that it will take forever and achieve nothing.

Well, just how wrong and out of touch is this Liberal government? The Liberal Minister for Revenue and Financial Services, Kelly O'Dwyer, has repeatedly avoided answering questions on whether it was wrong to delay establishing a royal commission after weeks of shocking revelations. She should admit that we have all been appalled by the number of issues that have been aired at the royal commission.

The unfortunate thing about this royal commission is that it appears the banks and the government have colluded to write the terms of reference, as they conveniently omit references to bank-appointed receiver managers, one of the most problematic areas. It is almost totally unregulated and subject to many damning reports. Last month, the banking royal commission devoted just two weeks to small business lending and foreclosures. This is inappropriate, given the issues raised in numerous past Senate inquiries, the magnitude of the misconduct and the complexity of the evidence.

The commission heard stories of misconduct by bank-appointed receivers that raised serious concerns, yet these issues were not allowed to be considered as they fall outside the terms of reference. The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has expressed dismay at the brief period allocated to small businesses. The same thing happened in Brisbane this week when cases of rural lending were heard, with more stories of unconscionable and dishonest bank-appointed receivers and agents falling outside the commission's terms of reference.

The commission's terms of reference need to be amended. The government has lobbied us to agree to cuts in the company tax rate that would effectively give banks millions in extra revenue at the cost of the Australian taxpayer. Senator Brandis was concerned about the cost of this royal commission, and here we have the government proposing tax cuts that would give the banks far in excess of the cost of this commission. It is in the interests of the nation that banking misconduct be exposed, and that past and present executives be held accountable. The cost of doing this is insignificant in comparison to the economic benefit gained by having an honest financial system.

I call on the government, firstly, to immediately extend the terms of reference for the banking royal commission to include receiver managers and bank-appointed agents, including valuers and independent accountants. Secondly, it should extend the time frame and funding for the royal commission in order to allow it to be more diligent and inquisitive in its investigation. If the government is serious about cleaning up the industry, it should agree to this. There is no justifiable reason not to. If the royal commission is to address the concerns of the many past inquiries, it must be given the powers to investigate and allowed significant time to do so.

Lastly, I would like to thank everyone in the Senate for supporting and getting this royal commission up; you know who you are.