While I’m sure some of you having been taking an avid interest in the Banking Royal Commission, there’ll be others who haven’t quite kept up.
One of the shocking takeaways so far is the discovery that banks are putting profits before their customers. Of course, when I say “shocking” I’m only refering to handful of people who’ve never had any dealings with a bank, because I’m sure the rest of Australia is well aware of the way in which banks work. You only have to look back to when some banks charged people who used the tellers because they wanted to “encourage” people to use the ATMs. When they’d got people accustomed to these machine things, they reduced the number of humans actually working behind the counter and started charging for using the ATM.
To anyone who’s dealt with a bank, the revelations at the Royal Commission are no surprise. It’s as predictable as Dan Tehan telling us that Labor’s proposal to fund preschool for three-year-olds is “a big headline number, it’s big spendage by Bill Shorten, which means that your taxes will go up. All it shows is that Labor will be a big-spending, big-taxing government.” We know that this is going to put our taxes up because it’s costing $1.7 billion, unlike the $4.3 billion which Tehan’s government just gave to the private schools. Anyone who’s listened to the Liberals knows that any money they spend is fiscally responsible, but any money Labor spends will put up taxes. (To be fair, Tehan’s remarks weren’t entirely predictable because I wasn’t aware that “spendage” was a word.)
One should hardly be surprised that the insurance and superannuation arms of many financial institutions were even worse. After all, when you campaign against changes that ensure when you give financial advice, you’re expected to be acting in the “best interests of the client”, sort of gives the game away. It’d be like doctors campaigning against legislation that prevented them from prescribing medicines that were likely to kill their patients, arguing that their livelihood depends on the kickbacks that they get from dangerous drugs.
So far it’s gone something like this:
Royal Commission: You seem to have sold inappropriate policies to some people.
Financial Institution Representative: Inappropriate, how?
RC: Well, when they tried to collect, they discovered that they weren’t eligible.
FIR: Yes, well, that was because they didn’t fully understand their insurance policy. You see, people take out insurance so that they have peace of mind and they don’t always look at the fine details.
RC: But you continue to take their money even though they weren’t insured against the disaster that happened?
FIR: Well, that’s because the disaster wasn’t anything they were insured against. For example, a casual employee doesn’t have a regular income so income protection doesn’t pay out because it only replaces their regular income and because they don’t have one, they don’t get anything.
RC: So, effectively their paying for nothing?
FIR: No, no, of course not. Like I said, before they get peace of mind.
RC: But not if they actually need to collect?
FIR: Well, of course not. By then, they can’t work, their life’s in a mess and what good would money do when you’re too ill to work?
RC: You’ve also been charging dead people.
RC: Well, that’s hardly ethical.
FIR: Well, none of them have complained. Look, you need to understand that the policy clearly states that we’re entitled to charge them until such time as the client let’s us know that he or she is dead.
RC: How can a dead person let you know they’re dead?
FIR: Yes, I can see that it could be difficult. However, if their relatives or friends notice the policy and let us know, then we’ll stop just as soon as we get authorisation telling us that they are allowed to act on behalf of the deceased.
RC: And where would they get that from?
RC: FIR: Well, the deceased person would need to give them power of attorney.
RC: Surely, you can see why people are appalled…
FIR: Yes, I can see that some people may not understand the way insurance works.
RC: Which is?
FIR: Well, we take your money and give you peace of mind by telling you that we’re there if you need us. Then, if you try and collect, we’ll explain that it was a condition of the policy that you needed to make it clear at the time of signing that you didn’t have any pre-existing conditions, but clearly you must have or what happened wouldn’t have happened. Now, some things are just bad luck, but we’d argue that people’s luck is a pre-existing condition…
RC: So you put profits before your clients?
FIR: Of course. However, over the past few days of this Commission, we’ve all come to understand that we may have been a little overzealous in doing that, so let’s just wind things up. We’ve learned some valuable lessons and we’re sorry and we won’t do it again, ok?
Yep, the Royal Commission’s report will be completed but not fully released because the government will need time to digest it, look at the recommendations and get the election out the way before agreeing that the banks and others have already taken most of them on board, so legislation would just be expensive, unnecessary red-tape. Yep, it was the fault of ASIC for being asleep at the wheel.
So, all in all, if the public were silly enough to fall for the line in the sand argument again… Remember, Tony Abbott’s 2014 pronouncement that, after a few bad weeks, “Good government starts today!” or Turnbull’s suggestion that the government had lost its way but if he took over, it’d be a fresh start? We’re now up to Scott “third time lucky” Morrison telling us that everything’s back on track because he’s having a go. If the public were to buy the idea that things are ok now and re-elect the Coalition, the Royal Commission would have just been an expensive exercise which didn’t lead to any improvements in the financial sector and ScOMO would be proven right.
Although, these links make interesting reading when the Abbott/Turnbull/Morrison/Dutton government try to lay the blame at ASIC’s feet: