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Day to Day Politics: What a bloody scandal it is. As if they didn’t know!

Friday 20 April 2018

1 Although the Coalition fought a right royal battle to avoid a Royal Commission into the financial sector, in the end they had to give way to the Opposition – some of their own backbenchers, and public opinion.

During evidence in which the banks have admitted all manner of illegalities it has become obvious that the Government has been stridently trying to protect them from a number of accusations.

For many years now all sections of the community have been hankering for some form of inquiry into the banking sector. 

Anyone from farmers – small business – households, all of them fed up with the industry’s blatant disregard for the law – their fee-gouging and widespread profiteering.

So eager has the Government been to protect them that they have said in the past that a Royal Commission would serve no purpose because it would only dredge up things that have already happened, which rather misses the point of an inquiry altogether. 

Yesterday the former Deputy Prime Minister, Barnaby Joyce, came out saying that he was naive in his support for the banks but it would be fair to say that the Government was privy to their immoral behaviour for years and was just trying to protect them. After all, they donate around $3 million to the Liberals every year. Even when the Prime Minister announced the Royal Commission he did so reluctantly, saying he didn’t agree with it and was just giving into his backbench.

That major financial institutions would treat their clients in such a manner is atrocious to say the least, and that Government would seek to try to protect them is even more so.

The only question we are left with then is the rhetorical one. What is there to hide? Well, the evidence thus far would suggest plenty. To the point where the Treasurer has had to mention words like jail, criminal proceedings etc.

Labor did take, after spirited internal debate, a Royal Commission to the last election. However, at the time, the Coalition wouldn’t have a bar of it. Instead they opted for cosy one on one meetings with the four main banking CEOs.

Then public opinion got the better of them and a Royal Commission was announced of which two things are certain.

A The terms of reference will be inadequate (already talk about extending) and B the completion time will have to be extended.

I have to conclude that the Government was aware that all this was known by the Government and that it would come out at the Royal Commission. Sure, heads should roll, but it’s the Government that needs to go.

Surely, at the end of the day, in light of what is likely to be a very damming report the Government cannot then reward them with massive tax cuts. However, given this Government’s record they will probably be full of praise for themselves for implementing the RC and then do it.

2  Remember when Hockey and Abbott used to send its debt bus around with Labor’s debt written all over it? Alan Jones would shout and scream blue murder at the mismanagement of the economy and Murdoch’s tabloids would fill their front pages with outrageous lies.

Today gross debt is $523.4 billion (source aofm.gov.au).

Up $250.4 billion since the 2013 election, although the LNP promised to “reduce” it.

My thought for the day

“There are those who say he should just be ignored. I am not one of them. He is the proverbial gift that keeps on giving. The former Prime Minister Tony Abbott is so full of egotistical compost that he can continuously replenish his own effluence.”


30 comments

  1. paul walter

    Still trying to get past the breathtaking arrogance of the Bank executives such which bank’s Marianne Perkovic and the Burke and Hare grave-robbing scheme yesterday, before the Commission.

    Not has then been mention to my knowledge of whether bank bosses ordered compensation to victims of the thefts.

    Given the brutalities imposed on unsuspecting asylum seekers or aboriginals or Centrelink victims

    https://www.buzzfeed.com/aliceworkman/death-coverup?utm_term=.gdreRvPj4&ref=mobile_share#.mp43x51lR

    what penalities of a real world kind should be imposed on bank boards and executives for actual offences?

  2. New England Cocky

    These shocking revelations from the banks demonstrate conclusively that the management classes believe that they operate above the law with impunity from political interference provided they make regular generous donations to all brands of political parties and especially the NLP.

    Perhaps it is time for corporate governance to be made a personal responsibility of directors with responsibility accountable in a criminal court to the required “beyond reasonable doubt” standard. We have seen this evidence in much abridged form on television this week.

    So to make the punishment fit the crime:

    the guilty banks will spill the all the present directors at the end of the present term of office, ie the directors will NOT seek nomination for re-election; that will allow a new generation of bankers to be properly trained and installed;

    the bank staff and commission agents responsible for poor financial advice against the best interests of the clients shall not re-apply for licences nor practice in financial investment in the future; that should clean out the shonks;

    failure to comply with these recommendations will see the government remove the government guarantee from that banks foreign borrowings; crooked banks should never be supported by the taxpayers.

    I note the interesting comments above by PW.

  3. townsvilleblog

    Of course we understand that no matter how much tory politicians bang on about gaol time being served by bank executives, that it will in fact never happen. It only the working class who see gaol time for crimes as petty as stealing a loaf of bread. These bank executives will be publicly dressed down but never be punished.

  4. 245179

    “enough” will be exposed to appease the masses. The gobsmacking warts and all of greed / coverups and the like, will never see the light of day. The dust will settle here, and it will be business as usual, maybe a tweak here and there indicating “changes”, but it’s window dressing only. LNP will get the spin doctors to calm the waters, and all’s good. LNP will be loving the spotlight off their own circus within, this RC could actually play into their hands ( look, we got it wrong, but hey we bowed to community angst, and wow, how naughty those bankers have been, but we ( LNP ) are acting to clean it up………stay tuned folks

  5. Ella miller

    Like an illegitimate child in the past, the banks dirty dealings were known by many, yet swept under the carpet by the LNP. Thanks to Labor it has come about.Now the LNP are crowing like some cocky cocks, claiming it as their achievement.If I defrauded Centrelink like the banks have us I would be in prison quick smart.BUT NOT the big shots in the banks getting millions in wages and on going commissions.
    If this how corporations behave…and I suspect it is, it makes mockery of the LNP’s claims that by giving these same corporations tax cuts they will employ more people and increase wages. What a farce this LNP government is.No amount of crowing by SM or JF will remove the stench that stretches for miles from the LNP. SICKENING. Where is the Governor General???

  6. Gavin

    @paul walter “what penalities . . should be imposed on bank boards and executives . . ?”
    Penalizing anyone other than pensioners, the unemployed-low income earners or refugees sticks in the craw of the LNP. It’s a hard ask to get them to change that mentality, but who knows?

    In answer to your question, what if Executive bonuses are cancelled and/or retrieved? On top of that, perhaps reduce senior bankers salary to a reasonable multiple of average income until the industry is proven to have its act together?

    The Terms of Reference for the Banking RC is still not broad enough.
    ASIC and APRA were supposed to be monitoring the banks. Why didn’t they?
    Bank corruption also includes money laundering (Austrac recently found 53,700 breaches of the Anti-Money Laundering (AML) and Counter-Terrorism Financing Act 2006).
    Why have successive govts failed to enact the 2nd tranche of AML legislation?

    All roads lead back to Parliament House on this issue.
    Would even one Minister in this government care to attempt to answer that AML question?
    And watch msm studiously avoid any question that broaches the topic of AML legislation.

  7. Henry Rodrigues

    Remember Turdball vociferously defending the banks and insisting adamantly that there was no need for a Banking Royal Commission, and his ministers,almost all of them, backing him up, including the ‘fair’ Kelly O’Dwyer and the disgusting Morrisson and the hypocrite Barnaby while denigrating Labor and the Greens ? if people still vote for these bastards, they must have rocks in their collective heads. And to rub salt in the wounds, Turdball still wants to give the bankers a tax cut ?????? Oh but Mr Jobson Growth is living it up in good ole London with lovely Lucy in tow, The pair of scroungers.

  8. Egalitarian

    Yes Henry; Turnbull would have made a wonderful used car salesman. What he said yesterday has zero relevance today. He will say anything that makes him appear that he’s a strong leader.

  9. helvityni

    …maybe he wants to be seen by future generations as the great Australian Statesman…?

  10. wam

    What a great read today, short sharp and shiny. I am in awe of your ‘egostistical compost’ A so much better image than ‘shit for brains’ that it goes ‘straight to the poolroom’ right next to the rabbott’s suppository.

    Labor should have fun pointing out the millions wasted on trying to get unions, rudd and gillard?

    Out of the revelations of corporate crookery in the banks should come a RC into company regulations.

    ie a fracking company for the beetaloo basin is an unlisted public company with farming rights and is 98% owned by a canadian company centred in Dublin. If that is not suspicious enough, try to find any more details.

  11. Kyran

    As if they didn’t know, indeed. If you look on the union website, the bankers have been very busy producing a ‘solution blueprint’ which was well in hand before they demanded an inquiry into themselves. The bankers union (Australian Bankers Association) is a force to be reckoned with.
    Their first release was this, being a pre-emptive strike on claims they had been naughty;

    http://www.ausbanking.org.au/media/media-releases/media-release-2017/customers-set-to-benefit-from-new-banking-code

    Followed by a precis on how they understood that the mortgage industry may be a problem, at least in the consumers eye;

    https://www.ausbanking.org.au/media/aba-blog/customers-at-centre-of-mortgage-industry-overhaul

    The final report by the union into their industry has been released with a full summary of where they went wrong, how they will fix it and how they are really nice guys that just strayed from the path ever so minutely.

    http://cobpreview.crkhoury.com.au/

    If you copy the ‘Executive Summary’, I will hazard a guess that most, if not all, will be represented in the RC’s final report. In ‘Manipulation 101’, never ask for an enquiry until you are sure of the outcome.
    As for the practice of bank managers doing kerbside valuations before they increase loan amounts, the conflicting reports as to how much exposure the banks have to ‘interest only’ loans (up to 50% on their books a few months ago and now below 20%?), payday lending, etc, don’t hold your breath.
    The exposure of the Australian banks was small in the global perspective, but the government underwrote any potential risk, which the banks never paid for. We now have a home grown problem with our banking sector with the amount of debt they are carrying, about half of which is unsecured (credit card, personal loans, etc). A lot of the ‘secured’ part, mortgages, are interest only, usually on a five year term and then either ‘rolled over’ or converted to interest and capital (a 40% plus increase on mortgage repayments), which will be exacerbated by any increase on the cash rates, assuming the banks don’t pursue ‘rate hikes’ outside the ‘cash rate’ too aggressively.
    This may sound conspiratorial, but it seems to me the banks have commissioned this enquiry into themselves to preempt the scope of the enquiry, offer a mea culpa, and be well placed for the next inevitable round of government aid when their business practices are, once again, exposed.
    Thank goodness the bankers have a strong union.
    Thank you Mr Lord and commenters. Take care

  12. Ross

    A fine example of why all governments and especially coalition governments hate having to initiate a Royal Commission. They have a nasty tendency to turn around and bite said governments on the arse.
    It won’t help that Kelly O’Dwyer is a former bank executive either, Ms O’Dwyer should join Ms Cash behind the whiteboard hidden away from public view. Shane Warne at his best couldn’t spin Malcolm out of this mess. They will try but nobody is listening.
    Lets face it nobody should get their hopes up that anybody from the banks or AMP will take the fall or lose any dosh.
    They sacked the tea lady ages ago.

  13. Ross

    I was wrong, the CEO of AMP Craig Meller has taken the fall for misconduct by AMP.
    But seeing he was going later this year anyway, for poor performance no less, the fall is from the bottom step.

  14. Henry Rodrigues

    Ross……… What’s even more urgent is for the dishonourable PM to make a complete unmitigated apology to the Australian people for delaying, denying and using every tactic to admit that there was a need to hold a Banking Royal Commission. How bloody stupid does he look and feel now.

  15. GraemeF

    The Liberals are already rewriting history. Apparently now the Coalition were active moving towards the investigation despite the actual words on record. Now it is all Bill Shorten’s fault.

    The most dishonest and inept government of all times and I thought it was impossible to beat The Lying Rodent.

  16. 245179

    @ GF……we’ve had dishonest / inept govts for yrs, some worse than others. We have allowed the “bar” to get lower and lower, we have had front row seats to this now situation. Elections will again come around, and in the main, the same pathetics get returned. We are compelled to vote for pure trash, LNP / ALP newcomers are well versed in the party line, ticking the box of independants is also flawed. ( cooks in the kitchen etc ) we are in a horrible place, that we allowed to happen.

  17. Glenn Barry

    This is going so appallingly, more so for the LNP than the banks themselves, yet another wonderful example of Maljudgement Turnbull on the bridge with no idea whatsoever of where he is headed.

  18. paul walter

    https://www.theguardian.com/commentisfree/2018/apr/19/two-years-after-josh-park-fungs-death-his-family-deserves-answers

    I offered the Josh Park-Fing inclusion as an emphasis rather than distraction of John Lord’s post, as something that offered a context that demonstrates a defacto contradiction shown in the lettuce-slap on the wrist for criminals while the innocent face arbitrary draconian punishment for NOT being the failures the rulers are. Josh Park Fing’s destruction was an inevitable consequence of his assigned role as the human made an example of; not for criminality but as a suffering component of a subceptional message that rule by fiat is not to be challenged and that the state reserves the right to arbitrary punishment or redemption regardless of whether a subject is guilty or innocent.

    The system arbitrarily imposes definitions of false criminality and false virtue to insulate its members against natural justice and the rest of humanity but masks these as examples of justice, fairness and civilisation ( which is also the root cause of the offence taken by brainwashed right-wingers against Richard Flanagan’s speech).

    I wonder if this was the real message of Atwood’s Handmaids Tale?

  19. Andreas Bimba

    A substantial government owned commercial bank must be established ASAP and no banks should be bailed out by the federal government following the inevitable collapse of the property price bubble.

    When the greed obsessed big 4 banks fail, there customer base must then be provided with the opportunity to transfer to the government owned bank.

  20. Matters Not

    Why is the collapse of the property price bubble inevitable? Surely we shouldn’t rely on Keen’s predictions – given his track record over the last decade or so.

    The evidence suggests the theories he advanced had little predictive value. As I recall, he lost a bet and walked up a tall hill as penance.

    Should economic theories be evaluated in terms of ‘faith’ and not measurable outcomes? No reference to ‘testability’ – over time? Or is time completely elastic?

  21. jamesss

    There will be a great deal more to be revealed, as the RC digs deeper. Hopefully the terms of reference will be expanded, and the 1 year becomes 3. Or Just fine the crooks 50 Billion from each of the thieving money launderers.
    There is your foreign debt nearly paid for.

  22. LOVO

    One wonders if financial services will start recommending ‘shoe box’ banking as an safer means. The interest might be shyte…but the fee’s will be a whole lot less 😉
    If I was a Credit Union, I’d be rubbing my hands in glee about now…

  23. New England Cocky

    Slap on wrist with a wet tram ticket, John Lord!! We are told by reliable politicians like Kelly O”Dwyer (Liarbral), a former bank officer, that the NLP government really had the best interests of Australian taxpayers inland when they fought vigorously against the Banking Royal Commission because it was totally unreasonable for banks to disclose their unscrupulous methods and profit-driven motivation. The Australian public would have just been too gob-smacked to accept that the state guaranteed Big Four banks would rip-off the people with impunity and carte blanche from successive governments. So it is absolutely necessary to ensure that these obscene profits are maintained by the NLP government gifting $50 BILLION tax cuts to prop up their bottom line.

    Why, even Barnyard Joke, that misfit from the farm, failed to hear his pig-pen mate, Senator Whacko Williams, whingeing long and loud about rural constituents being ripped-off too regularly. But that probably was not a discussion point at the local pubs among the practicing alcoholics.

    However, will the RC demand that all existing Bank Board members retire from their positions and NOT seek re-election again? Unlikely. The ANZ CEO took an early holiday to escape the heat, but as happened in the 1987 “crash” when the Bank of NSW (Westpac) traded at a ridiculous loss after giving loans for ridiculous projects that strangely ‘failed’, we can expect few changes at the top of our banking system.

  24. Kronomex

    This whole situation purely and simply smacks of an electioneering stunt by the LNP.

  25. John L

    Appropriate punishment? Take 1 in 5, put them up against a wall, and shoot the bastards!
    Then, start on the bankers……

  26. LOVO

    John L. If we shoot the bastards, then won’t that make us like ‘thems’….bastards 😕
    What we need to do is come up with a more cleverer.. three word slogan…otherwise ‘everything’ will be for nought. 😫
    How’s about this one…-Federal ICAC NOW- ..’nough said 😤

  27. LOVO

    Oh… Oh…Oh….and so sorry to go off topic…BUT, “how’d Port go tonight “?? ,umm, Migs 😜
    Bwwaha etc (grins) 😆

  28. Andreas Bimba

    Matters Not @ April 20, 2018 at 10:31 pm.

    It is not fair in my view to denigrate Steve Keen when his analysis of our current predicament is superior to all his peers. He has reached his conclusions using actual data and a detailed simulation model. He has correctly identified that the ‘gorilla in the room’ is excessive levels of private debt, not government debt as claimed by most in the conservative and Labor parties.

    Increasing private debt levels much of which has been invested in speculative investments like real estate and shares, has driven most of our economic growth in the neo-liberal era.

    As private debt is matched with an obligation to repay such debt, only an increase in debt stimulates the economy. Now Australian private debt levels are at record levels and we have the world’s highest private debt levels invested in real estate. Soon only the most wealthy will be able to afford to buy a dwelling in our major cities.

    It is inevitable that private debt levels will at first stabilise and then decline. When this happens the economy will inevitably plunge into recession and real estate prices and most share prices will also collapse.

    China has private debt levels that are even higher than Australia’s and when their real estate and share bubbles burst this will rapidly reduce their demand for Australia’s raw material exports so we will face a two pronged assault. The Chinese government is already running fiscal deficits of 15% of GDP, compared to Australia’s 2.4%, so they have less head room for stimulatory economic expansion when needed.

    No one can predict precisely when our speculative bubbles will burst. Our conservative federal government has looked the other way as foreign money continues to inflate our real estate bubble, no doubt to delay such a collapse to the term of the next government which looks likely to be a Labor government.

    Steve Keen has predicted an Australian recession before 2020.

    https://m.youtube.com/watch?v=w8fCmUbjDtg

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