I have a dream that the outrageous performance of Westpac could lead to fundamental reform and the genetic engineering of one of the identical quads, the BIG4 banks which do not fulfil community needs or financial stability.
Australia needs a community orientated bank that will serve primarily the environmental and social sustainability of Australia, the farmers and their quest to sustain their land in the increasing extremes of climate, small business in rural and regional communities and indeed many individuals and community organisations.
Government has had pride in the Big4 and frequently extolled their survival in the financial crisis of 2007-9. Their wizardry didn’t seem to matter even if they had been squirreling away cash by charging the dead. Now that the chicanery is exposed, the government is little more than apologetic.
Government and Big4 are brothers in neo-liberalism, free markets and creative accounting to ignore the externalities to human health and the environment.
For many years the government irrespective of party label was dismissive of the need to reform the Big4 even when Senator John “Wacka” Williams repeatedly raised the appalling financial treatment of farmers.
In his quest for a Royal Commission he threatened to cross the floor and by 2017 he had garnered sufficient parliamentary support to demand a RC which the banks, not government, then agreed to.
The Royal Commission unearthed a rotting malfeasance of misdemeanour which clearly shocked the experienced commissioner who tried hard to maintain his usually bland facial expression.
However the brotherhood was not torn asunder. Despite Westpac’s millions of offences, leading to widespread anger in the community and media, the body language of Ministers is calmly reverend and carefully condemnatory, often spoken with a hushed voice pertinent to their close relationship. If the offences were by the family’s beneficent uncle caught with his pants down in front of small boys, might they be suggesting his belt broke?
Now AUSTRAC’s court filing shows the offending to be almost beyond comprehension. Twenty-nine million international transactions were not disclosed to the regulator with $11 billion that has moved into Australia unreported and then possibly used for evil purposes overseas.
The Westpac findings bring shame to the Bank, and even more to the government for not acting sooner. Reform is vital and yet even now action is doubtful apart from increased regulation and some financial penalties which would not harm the stability of the bank.
There is a pile of soiled washing on the floor, should we wash or burn the lot?
The government will wash the linen but stains will remain.
The track record of this government suggests it is unable and unwilling to grasp fundamental reform.
The track record of Senate Standing Committees on Economics is to fiddle away at the edges refining an outmoded system.
Government, economists and banks have failed to realise we now live in a different world. The priority now is the environmental sustainability of this nation under the inevitable dire assault of the climate, biodiversity and drought emergencies.
These needs have been recognised in small ways over a number of years with the creation in several countries of green banks which have had an important but limited role in climate mitigation by funding renewable energy development.
Recently the creation of public banking in California has recognised the social need for reform of banking and it will have great advantages for the rural and regional areas of that State.
Oh, if only Mr Keating in his enthusiasm had kept his hands off the Commonwealth Bank we might have some diversity with a bank for the people. John Quiggin’s article of 2001 had great insight into this unhappy event. Does Paul Keating have any regrets when he looks at the destruction of the environment around him? The Westpac debacle brings forth a dream of reform, the stars are aligned but government worries more about black holes.
The financial outlook for Westpac must be worse than imagined. A recent request to shareholders for $500m was dumped. Capitalisation must fall significantly on poor financial outlook. Government will impose fines commensurate with ensuring no instability of the bank, but what if they matched the crime? Then the government would have bought into this Big bank in a big way. With the issue of community bonds through public float this could become a community bank.
A bank to bring diversity to the system, to eschew investment in fossil fuels and other world damaging ventures and to invest in the huge transition needed by economy.
The Board would be of equal gender, the majority of experts being from agricultural science, small business, social services, climate and water science, sustainability science; the economic representation from reforming economists…..and perhaps honorary board membership for “Wacka” the sheep shearer from agricultural Jamestown, South Australia.
DAMM IT, there’s my alarum, it’s time to get up!
I dedicate my wonderful dream to “Wacka”
David Shearman AM PhD FRACP is a Patron of Economic Reform Australia and Emeritus Professor of Medicine at Adelaide University.