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Social Market Solutions: Senate Inquiry into Banking and the Banking and Financial Sectors

Denis Bright invites discussion on the ongoing role for Bill Shorten’s Banking Inquiry as federal parliament reconvenes on 30 August.

Initially dismissed by the mainstream media as an add-on to the 2016 federal election campaign, Bill Shorten’s commitment to a royal commission into the Australian banking system remains an unstoppable momentum.

There is a slight possibility that dissident members of the National Party might support the inquiry in the House of Representatives.

The best option is a more broadly-based senate inquiry into aspects of the banking and financial system which LNP dissidents would not dare to entertain. Consideration must also be given to mechanisms for systematic tax evasion by wealthy families and companies which are robbing the ATO of billions in unpaid taxation.

Whilst outrageous bank profits, salaries for CEO’s and indiscriminate bank charges are legitimate causes of concern, it is the detachment of the banking system from a commitment to the diversification of the Australian economy and the protection of living standards which is fundamentally more important.

In the traditions of the Commonwealth Bank, key components of the banking system were vitally interested in supporting national development and infrastructure projects, particularly in regional areas. These commitments continued after the establishment of the Reserve Bank in 1959 when the Australian Resources Development Bank also supported major infrastructure and commercial investment projects.

The social market model of national development ended with the Commonwealth Bank’s full privatization in 1996. All state owned banks and financial institutions like Suncorp in Queensland were privatized in deference to national competition legislation to the absolute delight of the federal LNP during the Howard era.

Australian banking drifted back to its traditional profit making focus for the benefit of the business sector and larger corporations.

As the mining boom recedes, doubts must emerge about sustainability of Australia’s return to an increasingly colonial style of finance which facilitates multinational control of Australia despite its emergence as the world’s twelfth largest economy under a social market system.

This corporate endeavour requires minimal government involvement as the commanding heights of the economy are delivered by the private sector. Costs are routinely passed onto consumers through quisi-corporate taxation regimes levied through prices for commodities and services as well as the familiar outrageous tollway charges or parking fees and food prices at privatized airports.

Eyewitness news coverage largely overlooks the corporate battles for control of Australian infrastructure which skirt the legal limits of guidelines established by the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission.

Just this week the rail transportation assets of Asciano were subjected to a $9.05 billion take-over offer from Qube Holdings and the Canadian-based Brookfield Infrastructure with the support of international venture capital funds.

The brave new world of the Turnbull Government welcomes such corporate acquisition games with transport assets that were once proudly within the unionized government sector.

Just another take-over: Asciano’s rail installations for corporate acquisition

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Asciano 2015

The matrix of corporate game plans is so intricate that only a senate inquiry will reveal the implications for the sustainable economic development of Australia by looking at investment alternatives in other middle-sized developed economies.

As the thirtieth anniversary of the fall of the Berlin Wall approaches, numerous social market challenges to the LNP’s steadfast market ideology provide good reading.

Critiques of contemporary financialization from Yanis Varoufakis, Noam Chomsky, Joseph Stigglitz, Dani Rodrik and others are often available on the internet. Activists can recommend the titles for local libraries in print and e.book formats.

In the meantime, the federal LNP is working on its own plans to sell more government assets, to manipulate its low interest rate regimes, to cut corporate taxes and to keep the government sector to less than 25 per cent of GDP.

Objectively, this old LNP market ideology is already in its twilight years. There are emergent problems facing the Australian economy in the post-resources boom which will not lessen through repetition of three word slogans.

Progressive senators have the inquiry processes and the resources to question the LNP’s market ideology and its consequences for Australia.

Best practice in development economics is vital to Australians at home and abroad in relationships with struggling Pacific neighbours like PNG which has been burdened by the federal LNP’s ghastly Pacific solution to our legitimate refugee challenges in this troubled globalized social reality.

denis-brightDenis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in developing pragmatic public policies for a contemporary social market that is quite compatible with existing globalization trends.

 

14 comments

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  1. Kronomex

    A Royal Commission into the banks is necessary but I would be astonished if Turnbull and his cronies go ahead with it even when the public, the informed one’s at the very least, would like to open the doors into their dealings. The LNP is there to protect the banks, and any other corporation for that matter, from any sort of scrutiny because they themselves could be left explaining their deep deep ties to the big end of town.

  2. Pilot

    The vehicle used by our Lying Nasty Party only has 1 gear, reverse!!! We have been running backwards ever since these idiots lied their way into power. They are simply full of lies and mistruths, 3 words slogans and no plan. Whilst ever they are in power, the most needy within our population will be robbed, kicked and abused by these lowlifes while they hand fists full of dollars off to their rich greedy mates!!

    Wake up Australia, ffs!!!

  3. Jaquix

    Clearly there is a lot of support for this Royal Commission – too many people have been hurt by the dodgy practices of the banks and the financial services/insurance industries. Bill Shorten is on a winner here – he can keep whacking Malcolm over the head with it. If he gives in, Bill should have draft Terms of Reference ready to whack him over the head with too. To make sure it can do its work properly, not hobbled by Coalition restrictions. That would leave Bill free to put another Royal Commission onto his policy platform. Plenty of subjects to choose from. The most popular one with the population (not politicians of course) would be into political donations, political party conduct generally, and corrupt practices such as Parakeelia (of which we have heard nothing lately). Wishful thinking on my part I suppose.

  4. stephentardrew

    Now for the terms of reference.

    They should include a revision of economics and banking allowing for professional submissions from our best academics in a challenge to the instability of the market place and the role of money supply in the economy.

  5. DownsouthWA

    Well said and suggested @Jaquix.

    Are all those that have been bitten by and/or angry at what is seen as questionable practices at best so gullible as MT would have them believe that a bit of pathetically soft verbal chest tapping (no one could call it beating!) will result in the banks tucking their collusive (oops I mean collective) tails in and go running into the naughty corner followed by the confession box. Hell would freeze over first – after they stop laughing that is.

    My wife recently worked for a bank. I won’t mention names, but it wasn’t in the east and a number of wolves were involved.

    Day in and day out she was scrutinised and bullied to sell financial products and services to a small country customer demographic – even if the customer didn’t need it or want it.

    Maybe I’m a bit old fashioned, but I though product sales was a combination of having products that there is a demand for, promoting and selling the products and combining both of those with a customer service experience underpinned by a genuine interest in the Client’s benefits and needs.

    When my wife couldn’t (and wouldn’t because of her conscience) she was sacked.

    In the big scheme of things, a small fry story (though huge in pact on my poor wife’s esteem), but it says a lot for how banks operate.

    A Royal Commission tomorrow would not be soon enough as far as I am concerned.

  6. Rubio@Robertson Electorate

    The Banking Inquiry is a winner. I agree that it was first dismissed as a joke. I hope the Inquiry eventually finds out how the rich and big firms use the banking system to evade their taxes. Maybe I will get invited down to discuss this matter with Malcolm and Lucy at Harbourside Mansion. The family’s pecuniary interest form needs more explanation.

  7. Davidbruce

    Our banking system is a pyramid system; a Ponzi Scheme. We need Economic Growth with inflation to support this monstrosity. If the growth stops, or deflation occurs, the Ponzi Scheme will collapse. How close did we come to that in the GFC? As a result of the policies of banks since GFC, we have trillions of dollars in government debts around the world. The Elite are hoarding their assets, money and gold, so there is NO trickle-down effect. Royal Commission or not, our banking system is teetering on the precipice of a cliff. I would be surprised if the banking system stays intact until Christmas 2016.

  8. Theresa

    Hear hear Denis. An enquiry into the banking sector is a must!

  9. Jaquix

    Rubio, I trawled through Turnbulls Register of Interests, (thank you) and saw “see attachment” several times, but couldnt see any attachment. Nice bit of obfuscation? Also checked some others incl Bill Shortens which was quite different from Turnbulls. No investment properties, no “funds” or other money-hiding vehicles.

  10. 2353

    Yes – we need a Royal Commission in Banking and Finance. It should be noted on your rail map above that in Queensland anyway, the Queensland Government owns the track through Queensland Rail, Pacific National Queensland (owned by Asciano) purchase rights to run trains on the track -> http://www.queenslandrail.com.au/forbusiness/the-regional-network

  11. Harquebus

    “Economies built on scaffolds of debt eventually collapse. There comes a moment when the service of the debt, as we see in Greece, becomes unsustainable.”
    “The only way to stop this move to the right is for genuine socialist movements and parties, such as Podemos in Spain, to organize and challenge the international banking system and its enablers in the political establishment. And they need to do it now.”
    http://www.truthdig.com/report/item/2008_all_over_again_20160624

    “For Smithian economists, the notion that there are, or should be, limits to economic growth is just beyond the pale of thinkable thought. For to admit that growth is a problem, let alone the problem, is to concede a fatal flaw in the whole system and opens the door to challenge from the left. So across the entire spectrum of mainstream economics, Smithian economists, for all their important differences, still all belong to the same church of “Can’t Stop Shopping” and worship the same idols of growth and consumption.”
    There you have it: insatiable growth and consumption are destroying the planet and will doom humanity in the long run — but without ceaselessly growing production and insatiably rising consumption, we would have economic collapse in the short run.”
    http://www.truth-out.org/news/item/36916-how-individualist-economics-are-causing-planetary-eco-collapse

    “Although the original authors of The Limits to Growth, led by Donella Meadows, caution against tying their predictions too tightly to a specific year, the actual trends of the past four decades are not far off from the what was predicted by the study’s models. A recent paper examining the original 1972 study goes so far as to say that the study’s predictions are well on course to being borne out.”
    As long as we have an economic system that allows private capital to accumulate without limit on a finite planet, and externalize the costs, in a system that requires endless growth, there is no real prospect of making the drastic changes necessary to head off a very painful future.

    Limits to Growth is on schedule. Collapse likely around 2020

    “All paper money eventually returns to its intrinsic value – zero.” — Voltaire.

  12. Pat

    A review is definitely needed and well overdue!

  13. Paul

    Thanks for raising these issues Denis! An inquiry into the banking system is needed. Hopefully, it commences very soon!

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