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Transcript of interview with Leon Byner: 5AA Radio: 21 November 2019: investigation of Westpac



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JIM CHALMERS MP

SHADOW TREASURER

MEMBER FOR RANKIN

E&OE TRANSCRIPT

RADIO INTERVIEW

5AA

THURSDAY, 21 NOVEMBER 2019

SUBJECT: AUSTRAC investigation of Westpac.

LEON BYNER, 5AA: There’s a lot of questions being asked now of Westpac. You would have

been aware on AA news that the Prime Minister said he is appalled by allegations that

Westpac broke financial crime rules 23 million times. His comment somewhat of an

understatement. Banks need to lift their game. Now this is serious stuff because the civil

proceedings were announced on Wednesday by the anti-money laundering and counterfeit

terrorism financial regulator known as AUSTRAC. This company is in massive trouble. But

what’s it going to mean for the shareholders? Because you know who they are? A lot of super

funds and many others. Let’s talk to the Shadow Treasurer, Jim Chalmers. Jim, thank you for

talking with us today. I appreciate the fact that you've given us some time. What is your

reaction to this and what from this point, in your opinion, needs to happen?

JIM CHALMERS, SHADOW TREASURER: Good morning, Leon, and thanks for the

opportunity. I think this is astonishing and as the Prime Minister said, it's appalling. It beggars

belief that over a multi-year period we could have 23 million alleged breaches of the law,

including something like almost 20 million transactions, including some extraordinarily dodgy

transactions.

There's a legal process and we need to be conscious of that as we talk about the issues

surrounding it, but there needs to be accountability here. We can't have a situation where one

of the biggest companies in Australia, one of the big four banks, the second of the big four

banks to have been caught engaged in this kind of alleged behaviour. We need to get to the

bottom of it. We need to make sure that where they've done the wrong thing, that the book is

thrown at them.

BYNER: Look, we've just gone through a Royal Commission and this comes up. How is it that

given it was known by AUSTRAC some years back, that these things were going on? Why

didn't this get raised in the Royal Commission?

CHALMERS: It's not entirely clear to me, Leon, when AUSTRAC first got onto it. It's behaviour

that's been going on for something like five years so it is longstanding behaviour. The

Commonwealth Bank was sprung engaged in similar failures and that was part of the pressure

that led to the Royal Commission. Your listeners would probably remember that for a couple of

years Labor was campaigning for a Royal Commission.

BYNER: Yes.

CHALMERS: The Morrison Government, before that Turnbull, were resisting that. They voted

against it 26 times. These issues were some of the reasons why we thought that that Royal

Commission would be appropriate. Back then we knew it was around the Commonwealth

Bank. We didn't know at that point, or I didn't know at that point, that Westpac was similarly

impacted but these are the sorts of reasons why we wanted a Royal Commission for so long.

We were surprised that that was resisted by the Government because we need to get the

bottom of these kinds of issues.

We've got four big, profitable banks here. At different times in our economic history that's been

a strength but we need people to have confidence in the banks. We need them to feel like the

banks are doing the right thing, that they've got the right processes, that they are as tight as a

drum when it comes to complying with laws, particularly these kinds of laws about money

laundering and counter-terrorism. I think a lot of people will be very disappointed with what's

being uncovered here.

BYNER: Do you think Brian Hartzer, the CEO of Westpac, should go over this?

CHALMERS: It's not up to us in the Federal Opposition whether or not that's one of the

outcomes of all of this. There has to be accountability. There's a legal process to determine

what that accountability looks like in terms of the bank. The CEO of the bank is a matter for the

board. Part of the discussion over the coming days and weeks will be around this issue but it's

not for us to determine.

BYNER: Tell me, the other thing I was thinking about, we talk about accountability and those

things are very important. But for the ordinary investor, which in many cases can be a super

fund, this is going to have a deleterious impact. The next thing is if the bank's going to be

paying out billions in fines, they're going to want to claw that back somehow, aren't they?

CHALMERS: It remains to be seen how big any financial settlement might be. We know from

the Commonwealth Bank that a big settlement was reached there, in their case hundreds of

millions of dollars. Who knows where this one might end up and I have to be a bit careful

because of the legal proceedings. Obviously, a big settlement has implications for how

shareholders view the company and you're right to say that a lot of people are shareholders via

their super funds so there will be an impact. You probably remember that when the Royal

Commission was handed down and the Government responded, share prices of the banks

actually went up.

BYNER: I remember that, yeah.

CHALMERS: So people will make their assessment about the value of the company as these

proceedings go on. It's not really for me to comment on where the share price might head. It

took a little bit of a hit yesterday and we'll see where it goes in the future.

BYNER: Do you think the revelations from this are going to revamp the way the banks behave

in a big way?

CHALMERS: I hope so. If there are processes and governance issues which are still

unresolved despite all of the attention of the last couple of years then it's in the interests of

every Australian that the banks get their act together and they make sure that where their

processes, their governance, and their technology are below par that they quickly get them up

to scratch. Our role in the Federal Opposition is to make sure that the Government does their

bit. I've already told you I was disappointed that they resisted the Royal Commission for a

couple of years. It then took them six months to tell us how they were going to go about

implementing the recommendations of the Royal Commission, which we said was dragging

their feet. I think a lot of people conclude when it comes to the Federal Liberals that their

heart's not in it when they talk about making the banks do the right thing. On the Labor side our

hearts are certainly in it. We want to make sure these things are cleaned up so that people can

have confidence in the financial system and in the institutions within it because it's such an

important part of our economy.

BYNER: Jim Chalmers, thank you for joining us. Appreciate the chat. Stepped out of a couple

of meetings for us. That's the Shadow Treasurer.

ENDS

MEDIA CONTACT: MEGAN LANE 0424 437 949

Authorised by Paul Erickson, ALP, Canberra.