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Government 'wait and see' on banks no good to customers.

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Senator Andrew Murray Senator for Western Australia Australian Democrats spokesperson for Business & Corporate Affairs

Press Release Dated: 15 Aug 2000 Press Release Number: 00/489 Portfolio: Business & Corporate Affairs Related: Finance and Administration

Government ‘wait and see’ on banks no good to customers In Question Time today, Senator Andrew Murray, Australian Democrats’ Finance Spokesperson, called on the Government to flag its position on the operation of ‘shadow ledgers’ by Australian banks.

According to the Australian Democrats, Senator Rod Kemp’s decision to adopt a ‘wait-and-see’ attitude to this controversial issue significantly increases the importance of tomorrow’s Parliamentary Joint Statutory Committee on Corporations and Securities. The committee’s focus is the “Provision of Bank Statements to Customers”.

Senator Murray today advised the Senate that allegations relating to the operation of ‘shadow bank ledgers’ by the Commonwealth Bank were broadcast yesterday on Channel 9’s ‘A Current Affair’. The allegations would again be aired before the committee. The Commonwealth Bank, the Australian Tax Office and the Australian Competition and Consumer Commission would also tender evidence.

“I welcome the fact that the Commonwealth Bank will be able to put its side of the tax story,” Senator Murray said.

“Issues relating to the alleged operation of ‘shadow ledgers’ by banks must now be addressed.

“Banks are presently and quite properly able to write off a bad debt and consequently reduce the bank’s taxable income.

“However, I put the question to the Government - is it really appropriate that a bank be allowed to claim a tax deduction for a bad debt when, by allegedly operating a shadow ledger, they keep that debt alive, regard the debt as payable and then continue to seek collection from the customer?

“The criteria and process relating to banks declaring a customer a ‘bad debt’ obviously needs to be investigated.”

Senator Murray said the committee would thoroughly investigate

the alleged failure of banks to send statements of outstanding debt and accruing interest to ‘shadow ledger’ customers.

“Consideration must be given to requiring banks to regularly provide statements to ‘shadow ledger’ customers,” he said.

“If some banks are not providing customers with this information, their customers would be kept in the dark - completely unable to track their increasing, or decreasing debt.”

Senator Murray said as a result of the seriousness of these allegations the Government would have to give urgent consideration to the Joint Statutory Committee on Corporations and Securities Report when it is presented to the Senate.


Top | Email Authorised by: Jim Downey, 10 Brisbane Avenue, Barton ACT 2604. Copyright © 2000 Australian Democrats Last modified: Thu, 18 May 2000 13:51:26 Today: Thu, 17 Aug 2000 12:27:02