This week’s bank boss hearings have been derided by critics as a “whitewash” doomed to fail.
On Monday, the Prime Minister defended the parliamentary hearings, which his government instigated and wrote the terms of reference for, promising they would yield useful results for “many years” to come.
“It’s very important to have a change to the culture of accountability so that appearance before the people’s representatives, in the people’s chamber, becomes a part of the banking calendar,” Malcolm Turnbull told reporters in Queensland.
“This is going to be a very important way of ensuring greater accountability.”
Commonwealth Bank CEO Ian Narev will front the lower house Standing Committee on Economics at 2pm on Tuesday. He will be followed by the ANZ’s Shayne Elliott at 9:15am on Wednesday, with NAB’s Andrew Thorburn and Westpac’s Brian Hartzer on Thursday.
But Labor’s Matt Thistlethwaite, deputy chair of the committee, said the hearings will be a “farcical charade” because of the limited time given to the four non-government MPs.
“We’ve got two days’ worth of questions we could ask these CEOs about some of the unethical behaviours and scandals in the industry,” Mr Thistlethwaite told The New Daily.
“The reality is, we’re only going to get 20 minutes each, so we won’t get the opportunity for real scrutiny in getting to the bottom of what’s going on in this industry and that’s why this whole charade is farcical.
“To really look at what’s going on in the banking industry and put in place necessary reforms to protect customers, we need a royal commission.”
As The New Daily reported in September, there are serious concerns, both from Labor and independent experts, that the hearings have been deliberately hamstrung.
Dr Andy Schmulow, a finance sector regulation expert at the University of Western Australia, previously said the committee’s skewed membership, short time limit and loaded terms of reference would make it very difficult to address the “plight” of aggrieved bank customers.
Three of the inquiry’s four terms of reference are unrelated to consumer concerns about recent bank scandals. Six of its 10 members are Liberal-Nationals, with three Labor and one Green. And the hearings will be limited to three hours per bank boss.
The bank hearings are part of the Coalition’s response to recent bank scandals. The government has also reversed Abbott-era funding cuts to corporate regulator ASIC, and created the Ramsay review, which is considering reforms to the Financial Ombudsman and the creation of a bank tribunal.
Committee chairman David Coleman, a Liberal MP and former banker, told ABC radio on Tuesday morning: “This public forum of 12 hours of hearings this week is a very substantial and significant development and I think it will lead to significant culture change in the industry.”
Labor leader Bill Shorten told reporters on Monday the “soft touch, soft ball, whitewash” hearings were the Prime Minister’s attempt to deflect support for a royal commission.
The Finance Sector Union, which represents hundreds of bank workers, agreed the hearings would be inferior to a royal commission because the committee has no power to compel witnesses, subpoena documents and “properly examine” banking sector problems.
“Calling bank chief executives to Canberra isn’t an adequate response to the problems of conflicted remuneration, sales targets, management culture, understaffing, offshoring, customer migration, branch closures, job security and a work culture that creates stress for bank staff,” FSU acting secretary Geoff Derrick said in a statement.
The committee is likely to ask:
(1) About individual cases of aggrieved customers;
(2) About claims from whistleblowers about a broken culture of incentives that is allegedly pressuring bank staff to push unnecessary financial products onto customers;
(3) How the banks have maintained such high profits during and after the global financial crisis;
(4) Why interest rates for credit cards and small businesses have remained high despite the dropping official cash rate;
(5) Why the CEOs are paid so much;
(6) Why it isn’t easier for customers to switch between the banks.