Bad banks, culpable coal industry, compliant government all in bed together
Jul 26, 2024
A People’s Development Bank would be appropriate to the needs and security of production in rural and regional Australia. The case for action is overwhelming and has been so since the Commonwealth Bank Australia (CBA) was privatised. Crucially the rural sector must lead the charge for Australia to retain our life support systems.
The Commonwealth Banking Corporation was privatised in stages between 1991 and 1996 under the Keating government.
By 2009 it was already apparent that the big banks existed only for themselves and their shareholders, while a People’s Development Bank would be appropriate to the needs and security of production in rural and regional Australia. Yet whether or not you believe in the coming ravages of climate change, it is rural communities that will sustain Australia in a world of food shortages and growing population. These are the communities needing the expertise and finance to increase efficiency, and revive marginal land. These are communities who could be made more sustainable by diversification of incomes and by the creation of more local renewable power sources.
In retrospect CBA privatisation was a very bad decision not only because it led to big banks behaving badly as shown by the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry Report in 2019. There was no government bank to deliver the needs of rural people.
As expected, much money was made particularly by the CBA; many customers were treated badly and reforms were handled with a government smack on the wrist which had no impact in the money making machines or their antisocial policies.
Indeed banking malfeasances have continued and in 2024 an ASIC report “Better banking for Indigenous Consumers” found that CBA and other banks kept at least two million Australians on low incomes in high-fee accounts, including many relying on Centrelink payments to make ends meet. This was unforgivable and one hopes unforgettable.
The role of banks in causing social and health damage by making huge investments in fossil fuel industries is often hidden from view.
For decades the coal mining industry receiving loans from banks has been aware of the deaths and illness caused by their product. Doctors reported these harms in the Medical Journal of Australia in 2011.
At the same time 70 members of Doctors for the Environment Australia from different regions of Australia wrote to the CEO and Chair of their banks to detail the serious health aspects of coal developments to which they made loans. Did the CEO’s accept a skerrick of responsibility or even interest? All the doctors had significant business interactions with their banks which were asked to confirm that their letter was seen by the CEO or Chair. The only responses received were from junior staff, for example, thank you for taking the time to write to the Chairman and the CEO. “They are currently out of the office and have asked me to reply on their behalf” Reminders were answered similarly.
In 2023 the ABC reported that Australia’s big four banks loaned $3.6 billion to fossil fuel companies and their projects
Since the last election more approvals suggest that Government, Big Banks and fossil fuel industries are in bed together. CBA is just one of many powerful financial institutions in an economic system that will likely lead to both economic and environmental collapse due to accelerating climate change. They fail to understand that the national priority for all institutions must be to work together to save our life support systems; equitable climate, adequate unpolluted water, ecosystem services and biodiversity by which we grow food.
To date there are many impediments to action in rural regions; local National members of parliament seem ignorant of rural plight and encourage their electors to oppose renewable energy, promote expensive nuclear energy as a distraction for the next election, and support some fossil fuel developments to provide jobs. Currently the withdrawal of banking services is counterproductive to making rural and regional areas sustainable. These must be provided by a new government financed People’s Bank.
The case is well presented by the independent public policy think tank Percapita which works to build a new vision for Australia based on fairness, shared prosperity and social justice. Percapita has produced a discussion paper “PostBank: filling a void, securing essential services”
A government owned bank would offer many benefits improving services for currently ‘underbanked’ customers, especially in rural and regional areas and improving standards across the financial services industry.
Percapita says this Bank would “address the urgent challenge of climate change, trusted public institutions, with a mandate to serve public, rather than commercial interests will be fundamental to restoring the trust of citizens in the foundations of our democratic nation”.
The establishment of a postal banking service in Australia would, by operating within the existing infrastructure footprint of Australia Post outlets nation-wide, provide banking services to Australians who are currently underserviced by the existing banking sector.
Les MacDonald wrote in P & I July 22, 2024 about Government departments acting as silos.
“It seems to me that at least a part of the solution is that policy skills in the public sector need to be dramatically improved and need to be organised in an integrated policy Department that is separate from the Departments that implement those policies”.
To solve our urgent task to sustain life support systems, ecological services, biodiversity and water sufficiency requires a separate integrated policy department.
Within this department the considerations will be PostBank, structural developments, local renewable energy, heat and/or storm shelters, secure meeting rooms and depending on the rural area’s population growth, medical and nursing needs and many more considerations. These will form sustainability hubs in rural Australia
This initiative will be enormously expensive but in many cases such as Middle Arm vast sums are helping to destroy life supports though emission production, high usage and pollution of water and contamination of agricultural land. Money is available but given to a gas hub that will help destroy sustainability.
Perhaps the Three Amigos – the Government, Big Banks and fossil fuel industries – should get out of their communal bed, have a hot shower to wash off their coal dust and neoliberal stains and examine the urgent and growing needs of our life support systems.
David Shearman is Emeritus Professor of Medicine at Adelaide University and previously held senior academic positions at Edinburgh University, where he qualified in Medicine and Biological Science, and at Yale University. He is author of many books on climate change and related issues. He has served on the IPCC, has been President of the Conservation Council of South Australia. With the late Professor Tony McMichael he founded Doctors for the Environment Australia in 2001. He is author and co-author of several hundred scientific and medical papers.
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