Posts

Only $80 billion of $1.2 trillion in deposits protected

Our banks are bastards, but they are well capitalised. Yet, if they were to run into trouble as is happening overseas, our government is only guaranteeing 7% of Australian money in the bank.

Transcript

Senator ROBERTS: My question is to the Minister for Finance, Senator Gallagher. Last week I asked questions about the funding for the deposits guarantee scheme, which was designed to protect the money in the bank accounts of everyday Australians—capped at $250,000 per account, $20 billion per bank and $80 billion total. Minister, when the scheme was brought in, the eligible deposits being protected were $650 billion. According to statement 9 of Budget Paper No. 1 of the October 2022 Labor budget—your budget—eligible deposits are now $1.2 trillion. How can $80 billion possibly protect $1.2 trillion in deposits?

Senator GALLAGHER (ACT—Minister for the Public Service, Minister for Finance, Minister for Women, Manager of Government Business in the Senate and Vice-President of the Executive Council): I think this question goes to some of the concerns that we’re seeing in global financial markets at the moment, and the impact on some banks overseas and some concerns that Senator Roberts is raising about the potential for impact here in Australia. The answer is the same as I gave last week.

Senator Rennick: You don’t know how to count.

Senator GALLAGHER: Thank you, Senator Rennick. Would you like leave to speak to this question or am I allowed to? You’d like to, would you?

The PRESIDENT: Minister Gallagher, address your comments to those opposite through the chair. Senator Rennick, resume your seat.

Senator Watt: Tell us about your Masters in Applied Finance!

Senator GALLAGHER: I know responding to interjections is disorderly, but Senator Rennick’s got verbal diarrhoea, it seems, this question time. He can’t keep it in. As I said last week, this is something the government is monitoring closely. In fact, the Treasurer is being briefed twice a day on what’s happening overseas, and is also being provided with feedback from regulators and from the banking system here. I think it is very good, and I would think that it’s something that this Senate would welcome, that our financial markets and our banking system are well regulated, well led and well capitalised, with good liquidity, and we are not seeing the issues that are being seen overseas. I did undertake, and I’m not sure if we’ve done this, to provide you with a written response to the question that you raised last week. I’ll chase that if it hasn’t got to you, as well as anything further I can provide in relation to the answer I’ve just given.

The PRESIDENT: Senator Roberts, your first supplementary?

Senator ROBERTS: My constituents, as I expressed last week and in the last question, are concerned. Minister, the protected amount is not indexed and, because of inflation, would need to be increased to $380,000 per account and $115 billion overall just to cover the same amount as the scheme did in 2008. Minister, will you increase the caps on the bank deposit guarantee to make up for inflation since 2008?

Senator GALLAGHER: In line with the answer I gave last week, of course the government would respond in relation to concerns that were raised about the operation of our banking system and the impact it was having here. We are not seeing that. I think Australians should be reassured that the Australian banking system is resilient and that all of our banks, as I said, are well capitalised and have strong liquidity coverage. The Treasury and regulators are closely monitoring the situation about potential impacts for Australia—and when I say that, I mean very closely monitoring. I can understand that people watching what has happened with Silicon Valley Bank and Credit Suisse would have raised concerns. I can understand that. The response is that since the GFC and since the banking royal commission there are measures in place to ensure the strong performance of our banking system, and we don’t have any concerns about it.

The PRESIDENT: Senator Roberts, a second supplementary?

Senator ROBERTS: Reviewing the minister’s answers, I have five questions on the guarantee so far. Firstly, the guarantee has not been adjusted for inflation, and so it offers 34 per cent less protection than when it was legislated. Secondly, the guarantee is not funded. There is no money available to implement it. Thirdly, the scheme only covers 7c in the dollar of deposits. Fourthly, the minister has refused to commit to activating the scheme if it was needed. Minister, can you explain why constituents should not conclude, as many have, that the bank deposit guarantee is a fraud and a lie?

Senator GALLAGHER: I don’t agree with that representation by Senator Roberts at all. I have answered the question in a general sense by saying that, if there were concerns as we saw in the GFC, of course the government, and I presume the parliament, would act. The point I’m trying to make is that at this point we don’t have concerns. We do not share the concerns. In fact, we’ve been given very strong reassurance by the regulators, by the banks themselves and by the systems that have been put in place by this place and the other place to ensure that we have a strong, well regulated, well capitalised banking system to precisely insulate from some of the financial instability that we’re seeing elsewhere. Yes, of course, the government would respond if we had to. At this point in time we are assured that that’s not the case.

/4 Comments/by

$4.7 billion bank heist goes unpunished

If you steal $100 you go to jail. If a bank steals $4.7 billion they just get a strongly worded letter.

The Government is trying to make sure bankers don’t face any personal responsibility or jail time when they commit a crime.

Transcript

As a servant to the many amazing people who make up our one Queensland community, I note that if an everyday Australian steals a few thousand dollars they go to jail, yet if a banker steals $4.7 billion they do not go to jail.

As at 31 December 2022, six of Australia’s largest banking and financial services institutions have paid or offered a total of $4.7 billion in compensation to customers who suffered loss or detriment because of fees for no service or non-compliant advice. ‘Banks gone bad’, greedily charging fees for no service and providing financial advice that failed to meet the standards for financial advice, ripped $4.7 billion off everyday Australians. And they got away with it. Let me name and shame them: National Australia Bank, AMP, ANZ, Westpac, Commonwealth Bank and Macquarie Bank. Australia has a Banking Executive Accountability
Regime, B-E-A-R, that’s supposed to hold bank executives to account. Clearly, BEAR does not work, because no executive has been fined, let alone jailed, for this corporate fraud.

Is corporate fraud now okay with Labor, with the Liberal-Nationals and with the teals? Apparently. Now Stephen Jones, the minister representing the banks, is planning to introduce legislation to take the penalties out of the BEAR scheme to expedite the banks ripping off more Australians in the future.

One Nation has a simple message for banking executives: don’t even think about it! Unless we keep and use penalty based regulation, nothing will stop these banks doing the same again. Free market competition, though, will bring the banks to heel.

A proper Australia Post bank will provide genuine competition for our banking cartel, using ethical, community based banking at thousands of new bank branches. It’s been proven with the original Commonwealth Bank a hundred years ago.

One Nation has a long history of standing up for everyday Australians. Clearly, the Labor Party does not.

/4 Comments/by

Iraq invasion was based on WMD lies

20 years ago Australia joined the USA in an illegal invasion of Iraq.

We were told Saddam Hussein had yellow cake and weapons of mass destruction, this was an outright lie.

Transcript

I commend the Greens for the intent behind their speech. We need scrutiny when we deploy people overseas. I commend our armed services for their work overseas and in this country. They have sacrificed a lot, and they have covered themselves with honour. 

But I remind the Senate of Mr Alexander Downer’s interview on the 7.30 program, on the last day before he retired, where he said that John Howard came from America and strode into cabinet and said, ‘We’re off to Iraq.’ That’s not good enough. Now is not the time to do this.

I want to refer to a new book recently released by Clinton Fernandes titled Sub-imperial Power: Australia in the International Arena. Clinton Fernandes is a Canberra man who works for the University of New South Wales and lectures at ADFA. He has the guts to tell it as it is. It reads: ‘We are a sub-imperial power of the United States. We are making a mess of things by following the United States blindly into conflicts.’ 

Look at the Afghanistan withdrawal. Look at the mess that was created. Look at the weapons of mass destruction and the lies that were told to justify our invasion of Iraq. Then, quite openly and blatantly, we were told, ‘Oh, there weren’t any weapons of mass destruction in Iraq; we lied to you.’ The United States did that. Australia did that. Britain did that. Tony Blair admitted it. Where is the accountability?

Yet, on the other hand, I’m conflicted. I had a haircut on Friday, and the barber was from Iraq. He said that Iraq is better off in certain areas. So I can’t speak with knowledge. 

There are two parts to the Greens motion in part (b): 

(i) urges the Australian Parliament and government to learn the lessons of the past and to never again be dragged into another country’s unjust war of aggression … 

I support that. We need to learn from this. The only way to get accountability is to ask questions about it.

The second part reads: 

(ii)  calls for the withdrawal of ADF personnel still deployed to Iraq today under Operation Okra and Operation Accordion. 

I can’t vote for that because I don’t know the background. I don’t know what the consequences will be, so I’m not going to open my mouth one way or the other on that, but I want to echo the words of Senator Watt: we need an inquiry into that deployment. I think the Greens are on the right track in opening that issue up, but I cannot support the suspension of standing orders to do that.

I do support the intent, which is to have an inquiry and to develop accountability for these decisions of wantonly invading other countries in support of the United States.

So I commend the Greens, but I won’t be supporting their motion for the suspension of standing orders.

I thank you for raising it. 

/1 Comment/by

COVID HEARING

,

Today, I questioned Senate Select Committee on COVID-19 witnesses from Services Australia and the Digital Transformation Agency in regard to their development of a Digital Passport.  These passport are unnecessary and will divide Australians into two tiers, barring many everyday Australians out of the places and businesses, we have a right to enjoy. 

Australian businesses have already stated that they are hesitant to check the vaccine status of customers due to concerns about staffing capacity and privacy implications. 

/20 Comments/by

Government squashes debate

,

The Government continues to make changes to the Senate that impact especially crossbenchers being able to speak out on issues. I’m sure the government would love us to be gone, but this is a democracy.

Transcript

I’ll just make a few remarks. I heard Senator Birmingham use the word ‘reform’. I’ve come to realise, over many years of listening to governments in this country, that that word is used to misrepresent what is going to happen. It implies it is good for us all. It is not. It is misrepresenting. The second point I make is: how can we assess the feelings of our constituents and then not express them here any more? The government does not want to assess, and neither do the Labor party, the feelings of our constituents. The third point I want to make is that we’ve had no notice on this, and there is control. That’s what this is about: control. And, always, beneath control there is fear.

We don’t like what happened with formal motions. Our response was not to run away, not to shut down, but to stand up and speak out. Even though it was only one minute, that’s what we’ve done. We spoke. We held people accountable. It doesn’t matter whether it’s the Greens and we disagreed or agreed with them; we had the guts to speak up. The core issue that’s driving this is decades of weak governance and no accountability, and this change continues that. We will continue to tell the truth and calmly speak up and rely on data, and round you lot up.

/by