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Bank Guarantee Raises Serious Questions

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In a recent Senate hearing, I questioned the government on its decision to include a standing appropriation—an open-ended budget allocation—in its Pacific Banking Guarantee legislation. This approach bypasses the annual appropriation process, removing Senate oversight and public transparency.

The Pacific Banking Guarantee is a scheme whereby the Federal Government guarantees the operation of banks across the Pacific. If these banks encounter financial difficulties, the Federal Government will bail them out. Why this is the business of the Australian Government escapes me. Why banks such as the Commonwealth and ANZ require a Federal Government guarantee, despite earning profits exceeding $15 billion annually, is a question they refused to answer. The Guarantee itself is worth no more than $2 billion—even in the unlikely event of a total loss. This Guarantee has been provided to give the Big Four banks a competitive advantage over other banks and financial institutions. With this Guarantee, they can borrow money at lower rates, thereby increasing their profits and creating an “I owe you one” sense of obligation to the Federal Government. I assume Minister Bowen intends to leverage this influence to “encourage” investment in wind and solar energy, despite the questionable economic viability of such ventures.

This is how government operates: influence-trading using taxpayers’ money.

Standing allocations cannot be questioned, and the only way to halt this flow of money to our major banks is through legislation that overturns the allocation. Given that the Greens have supported big banking in this country throughout the Albanese Government’s term – alongside the Government itself – any effort to restore accountability to the Pacific (big) Banking Guarantee is going to fail.

This reflects the contempt of the Albanese Government. The ALP is proving to be even bigger corporate lapdogs than the Liberals were.

Transcript

Senator ROBERTS: The Standing Committee for the Scrutiny of Bills requested a justification for why this bill includes a standing appropriation rather than being included in the annual appropriation bill, which would give the Senate oversight. Please explain why a standing appropriation is required. 

Senator CHISHOLM: Thanks, Senator Roberts, for the question. A special appropriation is more suitable for meeting possible liabilities than annual appropriations. While the likelihood the Commonwealth will need to make a payment is very low, we may be urgently required at any time to meet liabilities arising under a guarantee, which may fall outside the usual budget cycle. This means the annual appropriation process may not be available within the timeframe any liability falls due.  

Without a special appropriation, it is possible parliament will be recalled to pass an urgent appropriation or the Commonwealth can risk defaulting on its liabilities. The special appropriation is not proposed to have a direct dollar limit, as this provides the Commonwealth with flexibility to ensure it achieves a significant national interest objective, securing an Australian banking presence in the Pacific over the long term.  

The Commonwealth would not provide an unlimited guarantee, however there may be circumstances where the maximum amount guaranteed under the appropriation could change. This includes if the Commonwealth entered into a new agreement with another Australian bank and the legislation limits on the types of guarantees the government can provide to guarantees—only from an ADI banking business in the Pacific region. Specifically, the legislation limits the guarantee to only the ADI’s Pacific operations. 

Senator ROBERTS: So it’s an open-ended budget allocation. The guarantees being provided by this government are commercial-in-confidence. This means the Senate will not have oversight on what the government is agreeing to. Is that correct? 

Senator CHISHOLM: In terms of reporting obligations, any Pacific banking guarantee, including the ANZ agreement, will contain mechanisms to ensure a bank’s compliance with its obligations. This includes regular reporting on the total amount of guaranteed liabilities and the compliance with bank commitments as well. 

Senator ROBERTS: The duration of the ANZ guarantee is 10 years, meaning this government is binding future governments. Can the federal government withdraw from a guarantee at any time in those 10 years? If so, is there any sunset clause or time limit to the guarantees? 

Senator CHISHOLM: It’s a commercial agreement that’s been entered into with the Commonwealth. There is no sunsetting clause. 

Senator ROBERTS: I am told the World Bank is also working on a plan to assist correspondent banking intermediaries in the Pacific. Why didn’t you join that international effort, and will you use what they come up with as a way of sunsetting this arrangement? 

Senator CHISHOLM: Any Pacific banking guarantee is expected to complement the World Bank’s Pacific Strengthening Correspondent Banking Relationships Project, the CBR project. The government strongly supports the World Bank’s work on this in terms of the work they are doing in the Pacific. 

Senator ROBERTS: If you have strong confidence in the World Bank, why not let the World Bank do it? 

Senator CHISHOLM: Phase 1 of the World Bank project will establish a correspondent banking relationship provider of last resorts, which countries can call upon should they lose their financial correspondent banking relationship in a particular currency. It is intended to be a fallback for when there is no other commercially viable option. 

Senator ROBERTS: This bill does not specify what is being guaranteed, so let me ask. Does the guarantee extend to the Australian government guaranteeing loans by Australian banks to the governments of Pacific nations? 

Senator AYRES: Senator Roberts, we’ve just had a small changeover. I’m just trying to ensure that I can give you accurate information. The Commonwealth provides a limited guarantee to ANZ, under this legislation, in connection with banking operations in nine markets across the Pacific and Timor-Leste.  

Those markets are Cook Islands, Fiji, Kiribati, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga and Vanuatu. The guarantee only covers certain eligible liabilities, and it is only triggered if certain trigger events occur and result in a loss to ANZ. The Commonwealth has only provided the guarantee for certain eligible liabilities in order to minimise the risks and potential costs of any Pacific banking guarantee to the Commonwealth and to mitigate any potential competition or market distortion risks in Pacific financial markets and the Pacific banking sector.  

To preserve the non-distortionary mechanisms in the guarantee, the government will not be disclosing the specific terms of the guarantee, including the types of exposures that are covered. If it assists Senator Roberts, the government was, of course, provided with extensive commercial advice on the guarantee, including around the risks, and commercial risk assessments found the likelihood of a default to be very low. 

Senator ROBERTS: I appreciate your statement that you’d like to give me accurate information, but you didn’t answer the question. I take it that you can’t answer the question of whether or not the Australian government is guaranteeing loans by Australian banks to the governments of Pacific nations. 

Senator AYRES: I’ll try and answer a little bit more directly, if it assists. The reason that I answer it in the way that I do, Senator Roberts, is that the advice that is provided and the terms of the guarantee are, of course, commercial in confidence, for policy reasons, in particular so that they don’t distort the banking and financial services markets in the Pacific. I’ll get the team behind me to correct me if I answer this incorrectly.  

The question about the support that the Australian government provides to Pacific island countries is quite different to this set of arrangements, which is about ensuring that banking services are provided and that there is trade, the free movements of goods, investment and all of the things that go with having banking services provided with the facilitation and support of the Australian government. I hope that assists; I’m not sure that it will. If you’ve got further questions, I’ll endeavour to answer them. 

Senator ROBERTS: It doesn’t answer the question, but I’ll come back to it later. Minister, Australian banks like the ANZ raise money to lend in the market, issuing bonds and debt securities. If the intended use of that capital is to issue government-guaranteed loans to Pacific nations, which this bill would allow, does that not give banks like the ANZ a competitive advantage in the capital market? And is any oversight intended of the capital raising of Australian banks to make sure they are honest in their representations to the capital market? 

Senator AYRES: Any banking guarantee in the Pacific, including this agreement, will contain mechanisms to ensure a bank’s compliance with its obligations, which include regular reporting on the total amount of guaranteed liabilities, and to ensure compliance with bank commitments. There are measures undertaken in order to deal with that concern, which is at present, I would argue, theoretical.  

I hope that the financial markets in this area lift to a point that is consistent with the kind of development, growth, investment and trade that the Australian government is working with our Pacific partners to facilitate. That is in their interest and in our interest for that to occur. The kinds of measures that you’re talking about—I’ll put that backwards—do not have a distortionary effect on capital markets or on financial markets.  

There is extensive work that sits behind this that has been directed towards achieving that outcome. ANZ has made a number of commitments to its Pacific operations in the Cook Islands, Fiji, Kiribati, Papua New Guinea, Timor-Leste, Tonga, Samoa, the Solomon Islands and Vanuatu in exchange for this guarantee that includes maintaining face-to-face banking services and enhancing the ANZ Bank’s services, including digital services. That is important for people and businesses and economic growth and investment in each of those states.  

It supports ongoing access to correspondent banking services in the Pacific and international money transfers, including the Australian dollar but also the New Zealand dollar and the US dollar. It will also maintain fee-free remittances for ANZ customers. That is important for facilitating more trade and more transactions. It will involve investing an additional $50 million to enhance the ANZ’s digital banking offering in the Pacific, excluding in Papua New Guinea, again, mobilised by some of the issues about making sure that the effect here is to support providing banking services where they are at risk.  

The uplift that is engaged there will impact the ANZ’s retail banking operations everywhere, except for Papua New Guinea, where ANZ today currently only offers institutional banking services that play an important role for the mining sector and other parts of the Papua New Guinea economy. Alongside this, there are efforts to continue to support and promote financial inclusion and literacy, and ANZ will continue to support Pacific countries in terms of their infrastructure financing, in line with the bank’s credit risk policies.  

That is the nature of the impact of the guarantee, in terms of capital markets. It should not be conflated, of course, with the efforts that the Australian government engages in through EFA and various efforts to support infrastructure development and economic development more broadly in the Pacific. This is about supporting the banking infrastructure—maybe I shouldn’t say ‘infrastructure’, because it’s confusing—the banking retail network and digital services that sit alongside that throughout the Pacific states.  

Senator ROBERTS: I noticed that, in starting that answer, you used the words, ‘I hope that the financial markets lift’—I hope—to the trade, yet, in Australia, we had severe breaches of the law by senior banking and financial institution officials and no-one went to jail—no-one! You also said that you’d like to maintain face-to-face banking services in the Pacific islands, yet we can’t get that here in Australia. Minister, is this bill just putting more money in the pockets of the big four banks by lowering their borrowing costs relative to other banks? 

Senator AYRES: The short answer to that question, Senator Roberts, is no. It does not achieve that objective in any practical way. It’s not one of the principles that’s engaged here. Australia does have a very well-regulated banking sector, and that is a national asset for Australia. That is important for our capacity to deliver investment and growth and financial transactions and security for borrowers and lenders and projects.  

In times of financial stress, our well-regulated banking sector is a fundamental part of Australia’s economic resilience in what is a pretty challenging world that we live in. That is not related to what is being provided for here. There will always be, as you’ve alluded to, bad actors, bad things happening, malfeasance, errors, omissions or whatever in any system. I have no argument with that. That is what the regulatory sector is designed to deal with. This situation is about extending banking services that might not otherwise be extended to a part of the world that needs banking services, and it is in Australia’s interest for those to be provided.  

This ensures that, through arrangements supported by this legislation and also by the commercial and non-distortionary measures, it’s provided in a way in which there is no disadvantage to the Australian banking sector—and, when I say ‘banking sector’, what I mean is the kind of services that customers and businesses would need and expect from the Australian banking sector. Quite the contrary to the final suggestion in your question, this is not a matter of the government paying an amount to the ANZ; in fact, it’s quite the reverse.  

The ANZ pays an annual fee with respect to the guarantee, and the Department of Finance and the Commonwealth’s commercial advisor have provided advice on the annual fee. That fee amount, for some of the reasons that you’ve alluded to in some of your previous questions and in order to ensure that it doesn’t have a distortionary effect, is commercial in confidence and cannot be disclosed publicly. The guarantee isn’t a subsidy. It’s not a bailout. The government will not be providing any direct funding to Australian banks for their Pacific operations. 

Senator ROBERTS: That sounds like a protection fee. Let’s get this straight. Banks have no risk—they have a guarantee if they have any losses—so banks cannot lose, so that sounds like a protection fee. Minister, who drafted your bill for you? The banks? 

Senator AYRES: Certainly not. That is certainly not the case. This bill is drafted, this arrangement has been struck, in order to support regional communities in Australia and Pacific nations to access banking services. That is in Australia’s national interest. That is fundamentally what is engaged here. For Pacific nations, remaining connected to global finance is one of their highest priorities because it supports their own economic development and their economic resilience. Investment in capability; investment in new businesses; microfinance for small businesses; and making sure that project finance can be accessed for the kinds of mining, development, manufacturing and other projects that deliver good jobs, stable investment, national economic growth, regional interdependence and economic resilience in the region—all of that is in Australia’s national interest.  

Those are the questions that are being engaged here. In terms of regional Australia, this government has secured commitments from the banks that previous governments have failed to secure—a moratorium on regional bank closures from the four major banks, as well as an agreement to increase their commitment to, and their investment in, Bank@Post. I grew up in a little country town. I know how important those services are. And I know you would not be so mischievous as to suggest that there is a relationship between the services provided to regional Australians through their banks and the government’s determination to protect that— 

CHAIR: Minister, I hate to interrupt you, but it’s 1.30. 

Progress reported. 

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Australian Jobs Out, Overseas Workers In

The ANZ Bank has announced 3,500 job losses across Australia. NAB followed with 300, and Bank of Queensland added another 400.

What is going on?

Since 2000, housing loans have ballooned from around 55% to over 80% of the Big Four banks’ loan books. Mortgage brokers account for 77% of new home loans, meaning fewer bank staff is required. Meanwhile, small business and personal lending has plummeted from 40% to just 18%. As a result, banks have shut down 2,100 branches, abandoning the personal and business lending that once formed the backbone of their service.

Today, Australian banks employ 85,000 people nationally, while nearly 40,000 roles have been outsourced overseas. Total employment has dropped from 166,000 to 124,000 over the past decade. Despite this, bank profits have surged—from $27.5 billion in 2015 to $31.5 billion in 2025.

The latest round of job losses won’t be the last. Banks are racing toward a fully online model of operation, focused to only include asset-secured lending. That means personal loans, unsecured small business loans, and overdrafts for those without property as security will cease to exist entirely.

And yet, the Federal Government continues to support the banks with a guarantee that saves banks $3.5 billion in financing costs.

One Nation believes this public support should come with public benefit. We propose replacing the banking guarantee’s extra profit with a new Banking Code of Practice—one that guarantees face-to-face banking, fair compensation for victims of AFCA bank fraud cases, and a ban on de-banking legitimate businesses.

This would buy time to establish a People’s Bank—a public institution that will restore banking services and jobs to everyday Australians.

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How Banks are Forcing a Cashless Society & Digital ID: ABC Afternoon Briefing with Greg Jennett

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I discussed with Greg Jennett the cash drought and the news that Armaguard is in financial trouble, which could have repercussions for cash.

Armaguard is owned by transport magnate Lindsay Fox. His business interests extend not just to trucking but airports also. The Prime Minister attended Lindsay Fox’s lavish birthday party last year – a direct relationship there. Armaguard thinks it can use its connections with the Prime Minister to put its hand out for taxpayers money when there are other options available.

Banks are crying poor over the cost of their ATMs, but with profits at $31 billion last year, the banks could simply pay Armaguard more for their services. They could also stop blocking out smaller competitors like Commander Security, a small Australian cash handling company that wants to move cash for clients. Yet the banks refuse to accept their cash deposits. Why are banks forcing out profitable competitors? It appears so they can cry poor and put their hand out to the taxpayers.

The excuse that nobody uses cash anymore is a self-fulfilling prophesy. Banks are forcing people to use online transactions by closing bank branches – 2000 in the last 6 years, and by pulling out ATMs – 700 in the last 12 months. Banks charge fees on electronic transactions. They make nothing if you pay in cash and as they don’t know what you purchased, they can’t use that information to build your data profile.

The Optus outage last year demonstrated just how easy electronic commerce is to disrupt. Even before that outage drove people back to cash, usage had actually stabilised in Australia at $30 million cash withdrawals a month, with more than $100 billion of cash in circulation. Rumours of its demise are wishful thinking from our greedy, self-interested banks.

Banking is an essential service. If the banks are not going to fulfil their obligations and readily provide people with cash, then we need a people’s bank to do it.

Transcript

Greg Jennett: Now the use of less and less cash by Australians appears to be a choice made freely by consumers. But the problem is it’s having side effects right down the line all the way to the authorised secure trucks that transport cash from where it’s printed to the big four banks that buy from the Reserve Bank of Australia. Arma Guard is the one and only operator left in that market, and it’s in deep financial trouble with this side of its business that’s become a headache for the Big four banks, but also for some remote country towns, which you’re finding it hard to even get their hands on cash in some cases. One Nation, Malcolm Roberts, has been keeping an eye on the couch cash drought for quite a while now. He joined us here in the studio a little earlier. Malcolm Roberts. Welcome back to Afternoon Briefing. It’s been a while, so we’re glad you can join us. I know through monitoring committees and other aspects of the parliament here, you’ve been monitoring the decline of cash and its repercussions for quite some time. I thought we might focus today on some reporting about the possible decline of not one, but both cash in transit firms. These are the ones that officially transported around the country. Amaguard is under financial stress. What happens if they go under?

Malcolm Roberts: Well then banks need to find a way to move the cash. And what I think is going on, Greg, is that, well, first of all, Armaguard is owned by Lindsey Fox, who also owns other trucks, trucking businesses and also airlines. And he’s very close to Anthony Albanese who was at his birthday party recently. So, I think there’s some questions that need to be asked about that. But what’s happening is that Armaguard did a deal with the competition Consumer Commission just four months ago saying they promised if they were amalgamated, they would stay afloat for quite some time as a

Greg Jennett: … monopoly.

Malcolm Roberts: As a monopoly. And four months later they’re talking about shutting up shop. So that causes problems for the movement of cash and the banks want to get the taxpayers on the hook.

Greg Jennett: Alright, so who would or should pick up the tab if Armaguard is struggling here? Is it a government subsidy to them? Is it a renegotiated rate of payment from the Big Four banks? How does their financial predicament right now be alleviated?

Malcolm Roberts: There are competitors to Armaguard and one of them is Commander Security. It’s a small firm that can move cash around, but the banks refuse to deal with them. And the banks I think are even talking about banking commander security. They’re trying to wipe out competition. The other thing to remember, Greg, is you’ve taken a surprisingly strong stance for the banks. The banks have a social licence to fulfil. The banks operate in banking, and they must provide legal tender. That’s a fundamental to banking if you’re in banking, provide legal tender. And so, what we’re seeing is the bank’s trying to drive out cash and they shut 2000 branches in the last six years and they’ve shut 700 ATMs in the last 12 months. What they’re trying to do is drive out cash so that you have to use the bank digital transfers, which means you incur fees, which they’re missing at the moment, and also they miss your data. They want your data to build profiles about you.

Greg Jennett: Sure. So, in some country towns where bank branches are already thin or non-existent on the ground, I believe Australia Post has been playing a bit of a de facto role as a bank flying in cash in some cases at their own expense just to keep a town ticking over with cash. If we’re thinking laterally about solutions here, could Australia Post come into play with a funded obligation to be, I suppose, the bank of last resort in a country town?

Malcolm Roberts: Definitely the Australia Post licenced Post office is actually providing those services now, many banking services now, and they’re doing it for fees that some of the banks won’t disclose. Others will disclose. So, we would like to go beyond that and see if People’s bank, because the original Commonwealth Bank before it was privatised in 1995, was back in 1910 when it was formed by the Fisher Labour Government. It provided a vital service. It put our country on its feet, and it provided enormous competition to the globalist banks that own our big four banks. And so, what we need now is that same kind of competition from a people’s bank and the post office is one form of people’s bank that could be extended not just to a post office with banking services, but to a proper bank.

Greg Jennett: And should they be funded because under their obligations at the moment, Australia Post are in effect funded to do certain things but not the transportation of cash.

Malcolm Roberts: I think if they’re providing a service, they need to be compensated for that service. They need to be funded. And cash is a vital service. The availability of cash is vital because it provides competition, it provides choice, it provides freedom to escape the tyranny of the major banks.

Greg Jennett: As you’ve asked questions of different agencies in various committees on this over time, are you satisfied that they are focusing their attention on what looks like a pretty tight squeeze right now on Armaguard? We’re in an urgent state of resolution, aren’t we? Yes.

Malcolm Roberts: I think there’s an underlying premise to your question too, Greg. And that is that cash is dying. It’s not dying. It has declined until the recent years, but we still have 30 million cash transactions for withdrawal of cash [monthly] at the moment. A lot of people need cash. The Reserve Bank itself did a survey recently that said one in four older Australians can’t handle the internet – they must have cash. We also have $100 billion in cash in the economy. And so, cash is here to stay. And what we’ve seen is, I’ve been on a committee to inquire into the closure of bank branches in rural towns. And what we’ve seen is a deliberate push. It is deliberate, Greg to shut down bank branches and to shut down ATMs to drive people to towards cash. So, it’s people that decline in cash until recently when there’s been an uptick in cash, the decline has been driven by the banks for their own short-term and long-term money.

Greg Jennett: So, you’re saying this isn’t entirely market led by the customers, it’s actually being driven by them, but that’s irreversible, isn’t it? This trend towards bank closures only Last week in Western Australia, Bankwest converted itself as a subsidiary of the Commonwealth Bank of Australia into virtually a digital only bank. And we’ve had people on this programme, Malcolm suggest to us that that is a bit of a test bed for where others will certainly follow.

Malcolm Roberts: I think the banks will try to do whatever they can to minimise their costs and to maximise their revenue. But we must remember that banking is an essential service. Banks should not be controlling it at the moment, people. So, what we need is banks that provide a service and fulfil their social licence, they have an obligation to satisfy customers all over the country. And that’s what we need. And if they can’t do it, then let’s have a people’s bank like the Commonwealth Bank used to be.

Greg Jennett: Alright, well we’ll leave you to keep an eye on all things related to Cash Gold and the Malcolm Roberts in your work as a senator. And thank you once again for joining us today on this emerging story around Armagaurd. Thanks so much.

Malcolm Roberts: You’re welcome, Greg. Pleasure to be here.

Greg Jennett: Alright, we’re pretty much done with afternoon briefing for today.

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The NAB Exclusively Promotes Digital Transactions

Over-the-counter transactions at NAB have decreased 70% since 2015. The BIG Four banks have actively discouraged people from withdrawing cash over the counter in the past several years. By training customers in this way, the banks have been able to produce a ‘shock and awe’ figure of 99.95% reduction in cash transactions.

Sounds incredible, yet that’s exactly what it is. It isn’t so much a shift away from cash by the public – it’s a shift in behaviour by the banks.

The banks have no idea how many people are using cash. They don’t see cash transactions. They are actively discouraging the use of cash, then coming out with statements that people don’t want to use cash, which is just plain wrong.

According to many constituents, if a customer goes to a branch of the NAB to use the counter services, there is a high likelihood they will be shown how to use the ATM. The NAB says that’s because they need to know and be fully aware of the alternative options. In June, the NAB is pleased to report they saw 96% of customers making digital transactions. How many of those were walked outside to do that?

Mortgage applications are now being conducted remotely by 40% of customers. Pre COVID the figure was zero, yet post COVID the NAB has found that customers are very happy to take up the digital services for buying a house. The NAB report that a massive shift has occurred over the last few years. Social distancing and lockdowns furthered their digital goals.

The NAB’s reported 99.95% less cash payments is just for bank transactions within the bank itself. All real-world cash transactions are an unknown figure. Customers still need to go to the bank though to withdraw their money to use it in their daily lives. How hard is that becoming?

Ross McEwan, CEO of the NAB, says there are thousands of ATMs available to do this freely, and also acknowledges that Australia is a large country. The NAB says it looks at a range of factors when making decisions to close branches, including feedback from staff members and what is happening in the community where it has invested. How much of that is about listening to customers’ needs?

Transcript

Senator ROBERTS: Thank you for appearing today. Your submission includes this statement: ‘Banking transactions made over the counter at NAB branches have decreased by 70 per cent since 2015.’ Is that a 70 per cent reduction in actual transactions; and, if so, what are the figures for, firstly, total over-the-counter transactions in 2015 and, secondly, total over-the-counter transactions now?

Mr McEwan: I’ll ask Krissie Jones to address that question.

Ms Jones: I’ve got the data from 2017 in front of me. We understand that, in 2017, there were 35½ million over-the-counter transactions through our branch network. Certainly, there has been a large reduction over the period since then and, at the conclusion of this year, we expect that there will have been a 71 per cent reduction. We’ve seen a massive shift over the last few years with our customers starting to use digital services. In fact, in June, 96.5 per cent of interactions were digital ones.

Senator ROBERTS: According to reports made to my electoral office, if one of my constituents goes into the NAB to conduct an over-the-counter transaction, it is likely that the teller will march that customer out to the ATM in front of the bank and make them conduct their business there. Does your 70 per cent reduction figure compensate for increases in the use of ATMs in front of your bank?

Mr McEwan: First off, we should probably look at the circumstances in which a customer is shown how to use an ATM. It also depends on the branch structure that we have, as we’ve got a number of branches that are open for standardised hours, which will probably be three hours a day, and the staff member may have shown the customer how to use the services 24/7. But I’ll pass over to Krissie because, again, she runs the network and is very familiar with what staff are being asked to do, in training and developing customers and showing them odd services. Krissie, maybe you could talk to the senator on that one.

Ms Jones: Yes, sure. We want to make sure that our customers are aware of all of the options that are available to them. If they want to conduct their banking in a branch, then we would welcome them using the over-the-counter services. But we want to make sure that, for those examples of when a branch isn’t open, they know of the alternative options. Over the last few years, we’ve added in new functionality to be able to deposit a cheque on your phone from the convenience of your home. So we really want to make sure that customers are fully aware of all of those alternative options, whether it’s phone banking, digital banking options or Bank@Post. But, of course, if a customer wants to come in and talk to their local branch team member to do their transactions, we welcome that too.

Senator ROBERTS: This is a quote from your submission: ‘Only three per cent of our personal banking customers exclusively use our branch network to conduct their banking.’ Could you define ‘exclusively’, please. Does one ATM withdrawal or one call to report a stolen card constitute the loss of ‘exclusive’, as in ‘did not exclusively use over-the-counter services’?

Ms Jones: We do publish some of this information in our FAQ sheets as well, but our definition of ‘exclusive’is really about when a customer walks into the branch. So ‘exclusive’ would be a customer who comes in and only uses that branch for their transactions; it would not include things like the use of ATMs or other services, such as digital transactions.

Senator ROBERTS: So, if a customer used a bank for over-the-counter services every time, except for one call to inquire about a bank card, would that mean that they do not exclusively use over-the-counter services?

Ms Jones: It’s a rolling period and so it would be that, in that period, that wouldn’t be the case. But we look at it over different rolling periods.

Senator ROBERTS: You say here, ‘Only eight per cent of our business banking customers exclusively use our branch network to conduct their banking.’ That’s one in 12, which seems a lot to ignore, doesn’t it? Asking that same question again, does the same definition of ‘exclusive’ apply?

Ms Jones: Yes, it’s the same definition of ‘exclusive’. For both our personal customers and our business customers, I think we are seeing a really big shift in the way that they’re transacting. As I’ve said, in June, we actually saw digital transactions occurring with 96 per cent of our customers. So there really has been a very big change. Also, we are seeing more of our business customers starting to use alternatives as well.

Senator ROBERTS: This is another quote from your submission: ‘Over 40 per cent of home lending appointments are held via videoconference.’ That means that 60 per cent are not using videoconference; is that
correct?

Ms Jones: Yes. We offer a range of ways in which our customers can take out a home loan with us. They can go onto our website to find an appointment that is the most convenient for them. That can be in their local branch or over the phone; it can be with a banker coming to their home or their workplace; or it can occur by video. What we are seeing, even just in the last week, is more than 60 per cent happening over the phone or via video. But a large proportion of customers still want to come into a branch to undertake that conversation with the banker.

Mr McEwan: Just to give you a feel for the rapid change in those numbers, I can say that, pre-COVID, that was zero; we did not have that facility available. Today, as Krissie has said, these stats were put at 40 and, in the last week, that has gone even higher. So customers are very happy to take up those services, and it doesn’t matter whether they are regional or city-bound customers.

Senator ROBERTS: I quote again: ‘99.95 per cent of all payments made by or received by NAB customers were made digitally in 2022.’ Does that include when a person ‘beeps’ to pay for a coffee, petrol and the minutiae of everyday life?

Mr McEwan: Yes, it does.

Senator ROBERTS: If I withdraw cash from an ATM and spend that cash in a farmers market—in fact, I am noticing an increasing number of small retailers asking for cash payments—how would you know that I’ve paid with cash or not?

Mr McEwan: By way of a retail transaction?

Senator ROBERTS: Yes.

Mr McEwan: If a person paid cash, we would not know.

Senator ROBERTS: That’s right.

Mr McEwan: What are you asking for help on with that one? When people have paid with cash at a market or out in society, we have never known what those numbers were.

Senator ROBERTS: So what is the statistical basis for the 99.95 per cent figure, when you have no idea of what your customers are using cash for?

Mr McEwan: No. That 99.95 per cent figure of the transactions that come through our bank are done digitally; that is, the ones that we’re aware of. The definition of that stat hasn’t changed, as we’ve never known
what was going on with a trader or a person at a market who is taking cash for goods. Those stats have never appeared in our stats.

Senator ROBERTS: I made this same point with Westpac, I think it was: so we don’t really know what people are using cash for, but people want to use cash outside of the banking transaction.

Mr McEwan: That’s correct. Yes, you’re absolutely right: I do not know what you use your cash for and you don’t know what I use my cash for. But the point that we’re making is that 99.95 per cent of those interactions with the bank are now done digitally, and that doesn’t preclude customers doing what they like with their cash.

Senator ROBERTS: So 99.95 per cent of payments with NAB might be digital. With customers exchanging money with other customers, we don’t know what it is.

Mr McEwan: No, that’s right. Again, that’s not a service that I provide. Your paying cash to somebody else is not a service that I am involved in; it’s a service that they do themselves.

Senator ROBERTS: No. But for me to pay someone else cash, I need to come to NAB to get the cash.

Mr McEwan: Yes, or you could go to 4,000 ATMs around the country that I pay for you to use and they’re free to you, or you could get the money out at a branch or at 3,400 Australia Post outlets; they will give you the cash.

Senator ROBERTS: Cash is still important. So, on the face of it, your regional banking hubs are a good idea. I assume that these centres are there to handle face-to-face transactions with people from areas where a branch has been closed. You mentioned Emerald in Queensland, where I used to live some years ago. Can I ask: what is the catchment of that Emerald bank, please? How far away are the areas that it is designed to service?

Mr McEwan: We’ll have to look at that. Krissie, do you know the Emerald catchment at all?

Ms Jones: I do, but I want to make sure that we’ve got the facts right, so perhaps I could come back to you on that. We do have surrounding branches to Emerald. As well as our branch in Emerald there are Bank@Post facilities.

Senator ROBERTS: It looks to me as though the next branch, heading west from Emerald, is Longreach, which is four hours away. Is that a good indication of how far apart these regional branches are?

Mr McEwan: The regional branches will be quite different; some may well be at a shorter distance than that and others will be a longer distance apart. As you know, Australia is a huge country. But the point there is that there is a very large number of regional Australia Post offices that people can get to as well, which will service those needs.

Ms Slade: Krissie, you might want to talk about the things that we look at and take into consideration, such as where customers are travelling to already and the other branches that they’re using.

Ms Jones: When we’re making investment decisions or the decision to close a branch, we look at a range of factors, which include: where are our customers shopping; where are they banking; where are they are travelling to, whether it’s to see the doctor or the mechanic; and where do we need to invest to support them? So there’s a range of things that we take into consideration when we’re not only making investments but also making the difficult decision to close. We also seek input from our staff on the ground. We have a large number of colleagues—around 2,300 across NAB—who work across regional Australia, and many of those are bankers who face customers every day. That may be in retail, or it may be in regional and agri, which is where we have over 774 bankers providing services in those areas. So we listen to feedback from our staff members as well about what’s happening in that community, what’s most relevant for that community and what’s the way in which we can shore up in order to serve them as well.

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In Australia the Bank Robs You!

If you rob a bank, you go to jail. If the bank robs you, no banker will go to jail and they won’t even pay a fine. Maybe it has something to do with the Big 4’s top shareholders – Vanguard, Blackrock, State Street, JP Morgan, Charles Schwab, HSBC and others.

After 6 years of inquiries and a Royal Commission, the final Financial Accountability Regime Bill contains no accountability for bad bankers. We supported Senator McKim in trying to make sure bankers could be liable for personal fines if they misbehaved but the Greens caved, joining Labor to pass through the bill without the penalties.

One Nation won’t stop our fight to make bank executives accountable and find justice for their victims.

Transcripts | Speech and Questions

Yesterday, as a servant to the people of Queensland and Australia, I spoke on Senator McKenzie’s matter of public importance regarding the decision by Minister Catherine King to give Qantas a substantial commercial advantage in the Qatar Airlines application for more flights to Australia. I pointed out that the Qatari government owns Qatar Airlines, while Qantas’s most influential shareholders are the merchant banks that invest money on behalf of the world’s richest predatory billionaires. I raise the question: who does this government represent? Is it everyday Australians or foreign wealth?

Here we are again, the very next day, debating the Financial Accountability Regime Bill 2023—a bill devoid of financial accountability. A financial accountability regime bill with no accountability is a bill that could more rightly be called the ‘Letting bank executives do whatever they want bill 2023’. Banking executives in Australia are a protected species for the same reason Alan Joyce and Qantas are protected: crony capitalism.

The big four banks have almost identical major shareholders. They have the same owners as Qantas, including Vanguard with $15 billion in shares in the big four banks, BlackRock with $5 billion, and then the usual suspects with smaller holdings, such as State Street, JP Morgan, Charles Schwab, HSBC and others. With these common owners making up a controlling share, it means we do not have four big banks. We have one monstrous bank with four divisions working under four logos. Why would the banks compete with each other when that competition will lessen their profits and, in turn, reduce the flow of dividends to these investment funds?

Our banking legislation, our checks and balances, were not written for an eventuality where investment funds with A$40 trillion in funds available bought controlling shareholdings in all the big four banks and used those shareholdings for their own financial benefit in a way that reduces competition and has reduced competition. Investment funds get assistance from complicit executives. Those complicit executives know the deal when those same investment funds elect directors who then employ the executives. The same executives know that they have to follow orders to keep their jobs and their fat pay cheques. The same executives then pursue the now infamous ESG measures to ensure that a bank lends only for projects that meet so-called environmental, social and governance standards. ESG is shorthand for using banks to enforce political objectives, like enforcing net zero by defunding coal, gas and most mining while lending for speculative investments in hydrogen and similar unproven fantasy technology.

Why would banks take a course of action that puts shareholders’ funds at risk? It’s because these big investment funds own the companies that profit from those investments. ESG is nothing more than the billionaires who run the world using their ownership of our banks to lend to themselves for risky investments that, if they fail, will reduce their equity. It will reduce the equity of mum and dad investors more. They carry the risk. Everyday Australians are shouldering the risk of these misinvestments that benefit only the world’s most wealthy individuals. As George Carlin famously said, ‘It’s a club, and you’—everyday Australians—’ain’t in it.’

I wonder if whoever made the decision to take personal financial penalties out of the financial accountability regime is in the club. Are you? Those penalties were in this legislation when the Turnbull government introduced it—although, of course, it is not being used, because nobody in the Liberal Party or the Labor Party has the guts to take on these investment funds—least of all, it would appear, Assistant Treasurer, Stephen Jones, who authored this bill.

Everyday Australians are feeling the pain from the failure of this government to govern without fear or favour. Bank branch closures and de-banking are hitting everyday Australians hard, and the banking cartel just sit back and count the profits—record profits. The most glaring exclusion from this bill is the absence of civil penalty provisions such as fines for bankers. To translate that into plain English, it means that senior bankers who behave badly will not, under this bill, face personal fines—no fines at all.

Making bad bankers pay big fines isn’t an idea One Nation and the Greens pulled out of thin air. The Treasury department was the one that initially proposed it. The proposal paper for the financial accountability regime that Treasury published in 2020 included civil penalties for bad bankers. The big bank lobby circled the wagons, mustering all of their high-powered lobbyists and industry groups to browbeat Treasury into removing the personal civil penalties. When the Morrison coalition government introduced the 2021 version of this bill, civil penalties had disappeared. Labor had a chance to fix that when they introduced their versions of the bill, first in 2022 and now with this one in 2023. Instead, the Assistant Treasurer and Minister for Financial Services, Stephen ‘I love the bankers’ Jones, has joined Labor at the hip with their crony-capitalist banking suck-up mates in the coalition.

This bill’s time line is a glaring example of what’s wrong with our country’s governance. In 2017 I chaired the inquiry of the Senate Select Committee on Lending to Primary Production Customers, while at the same time we called for a royal commission into the banks. The horror stories we uncovered in that Senate inquiry were enough to make my skin crawl and my stomach churn: banks stealing land and even livestock straight out from under farmers’ feet, cattle rustling, foreclosing on properties where there hadn’t been breaches of loan repayments, preying on vulnerable people, stealing whole farms, and rewarding mates amongst insolvency practitioners and other farmers. Rabobank, after being fined hundreds of millions of dollars for serious breaches in America, was destroying families in our country. All under your watch.

The evidence of banking practices we uncovered during that inquiry forced the government’s hand. With the testimony of those victims, the government had no option but to call the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. This bill now before us supposedly implements recommendations of that royal commission. What a joke! It’s been more than six years since the Senate select committee I chaired was established. At the end of that long road not a single banker has been thrown in jail for their criminal actions—not one. To my knowledge, not a single banker has paid any civil penalty for the outright fraud uncovered in the royal commission—not one. At the end of the long road to this bill we have something that still will not impose personal civil penalties on bankers who breach their accountability regimes. And you guys just let it continue. If you want to know who holds all the power in this country, look no further than the fact that civil penalties have been dropped.

One Nation will be supporting Senator McKim’s amendment to insert civil penalties back into the bill, but, alas, that failed. If that amendment had been successful, we would have supported the bill. Without that amendment this bill does not go far enough to place accountability on misbehaving bankers, and we cannot support its passage. Minister, why does this bill not contain civil penalty provisions for senior bankers who fail their accountability obligations?

Minister Gallagher: Thank you and I acknowledge Senator Roberts’ speech. I don’t agree with large parts of it but in this bill there are penalties within the legislation before us.  They will, individuals can lose deferred remuneration – they can be disqualified from being able to work in the industry and there are individual civil penalties for assisting an entity’s contravention of obligations.

Senator Roberts: Minister, are you aware who owns our big four banks? Let me read the list of shareholders of those banks right now so that you may have some idea of where I’m going. Shareholders of National Australia Bank Limited are the Vanguard Group, with 3.3 per cent; BlackRock Fund Advisors; Vanguard Investments Australia Ltd; Norges Bank Investment Management; State Street Global Advisors; Colonial First State Investments; Goody Capital; BlackRock Advisers; Netwealth Investments; and Caisse de depot et placement du Quebec. Let me read them for the Commonwealth bank: Vanguard Group, BlackRock Fund Advisors, Vanguard Investments Australia, Norges Bank, Goody Capital, Australian Foundation Investment Company Limited, BlackRock Advisors, Netwealth Investments, FIL Investment Management and Vanguard Global Advisors. Westpac: the Vanguard Group, Vanguard Investments Australia, BlackRock Fund Advisors, Norges bank, State Street Global Advisors, Goody Capital, Advance Asset Management, BlackRock Advisors, Australian Foundation Investment Company, Netwealth Investments. ANZ group: the Vanguard Group—is there an echo in this room? BlackRock Fund Advisors—there’s that echo again! Vanguard Investments—it’s still here! State Street—another echo! Goody Capital—another echo! BlackRock Advisors—another echo! This place is an echo chamber, and that’s probably very appropriate. There’s Netwealth Investments—another echo! Dimensional Fund Advisors—they’re only in ANZ. There’s Vanguard—another echo! BlackRock investment—another echo! Minister, are you aware of this?

Minister Gallagher: I’m certainly aware there’s millions of shareholders in Australia’s big banks and across Australia’s financial system, yes.

Senator Roberts: So you allow it to continue with no accountability. It seems we don’t have 4 big banks. We have one monstrous bank working under 4 logos, 4 divisions. There’s no, there’s no difference between their primary products and services and their ways of operating. Their product, services and operations are similar. So similar that I recognised, as Chair of the Senate Select inquiry into lending the primary production customers back in 2017, that they operate as one. They are a cartel. Are you aware of the common ownership and common practice, product and services of these banks?

Minister Gallagher: Well, that information is available, as you know, to all of us.  It’s transparent around shareholding in big companies in Australia.  So I’m aware and you are aware, and you’re aware because that information is available.

Senator Roberts: The difference, Minister, between you and I is that I want to do something to fix it. Minister, what will your government do about protecting Australians from these parasitic predators?

Minister Gallagher: Well, I don’t agree with the language that you’ve used Senator Roberts.

Senator Roberts: The Minister says, in effect, that she agrees they are parasitic predators. So legislation needs to have teeth. Without teeth, massive regulation protects the Big Four from accountability because of the complexities needing deep pockets for deep pockets for lawyers. A farmer, small businessman, even a woman, cannot afford the lawyers that the big banks resort to at the drop of a hat because they’re protected by deep, complicated legislation. These barriers are barriers to accountability. Are you aware of that? And what do you plan to do about it?

Minister Gallagher: Well, no, I don’t agree with that. The bill we are debating or we completed debated of yesterday is the Financial Accountability Regime Bill. So no, I don’t agree with that. And I do believe since the Royal Commission there has been significant increase in and protections for us through legislative reform like this to make sure that we get a properly regulated and accountable financial system. This is one piece of that. So no, I don’t agree with you.

Senator Roberts: Minister, these regulations provide barriers to entry of new competition to the Big Four or the Big One. Are you aware of that and what do you plan to do about it?

Minister Gallagher: Sorry if your questions about do I think this is a barrier to competition? No.

Senator Roberts: That wasn’t my question. The massive amount of complex regulations, they’re protecting the big four banks, they’re a barrier to competition.

Minister Gallagher: I mean in a sense you’re arguing in a circle because we are putting in place legislative protections and regulations to make sure there is a stronger financial system in this country to deal with some of the problems that we saw come through in the lead up to and during the banking Royal Commission to protect consumers and to make sure that we have a strong, profitable, well led banking system financial system in this country. This legislative response is part of that. The regulations are there to offer that protection. They’re not there to limit competition.

Senator Roberts: They’re effectively working as such Minister. The government’s bank deposit guarantee scheme is worthless. Firstly, it’s not automatic, because the Treasurer has to invoke it and if he doesn’t, there’s no guarantee of bank deposits. Secondly, it covers only a maximum of $80 billion out of $1.3 trillion in bank deposits. For example, the Commonwealth Bank, I understand, has 30 million deposit accounts, meaning an average of $670 per deposit. Meanwhile, the previous government passed a bank bail-in provision that your party supported. These are other ways in which banks avoid accountability for their mistakes and greed. They take none of the risk and all of the profit. They have no penalty for excessive greed causing failure, because government bails them in. When will your government start protecting Australian citizens and revoke the bail-in, for example?

Minister Gallagher: Well, the work that has come out of the royal Commission, of which this is a part of, is precisely about that, Senator Roberts.

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