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Coalition MPs rally against bank bastardry as Narev salary soars
The Australian 12:00am August 16, 2016
Sarah Martin, David Crowe
Coalition MPs are pushing for a new tribunal to help victims of “bank bastardry” that is boosting the “obscene” profits of the sector, amid anger over a $12.3 million pay packet for Commonwealth Bank chief Ian Narev.
Government MPs say while Mr Narev’s 50 per cent pay rise might be excessive and out of step with community expectations, it is not justification for a lengthy royal commission that is being urged by Labor when faster action could be taken about issues hurting customers.
Queensland Liberal Warren Entsch, who Labor is hoping will cross the floor to support its demand for a banking royal ¬commission, told The Australian he would prefer a new tribunal and will next week present a victim’s impact statement to Malcolm Turnbull and Scott Morrison as he seeks to garner support.
Southern Sydney Liberal MP Craig Kelly is pressing for new laws to stop banks from charging late fees on credit card payments after the ANZ recently won a High Court case on the issue.
Mr Kelly, who is a member of the House of Representatives’ ¬economics committee that will hold hearings into the banks, said the government should act after the High Court rejected claims that levying fees of $35 for late payments on credit cards was unconscionable conduct.
“For our side, it creates a great opportunity to show we are doing things proactively in this space,” Mr Kelly told The Australian.
“What’s the royal commission going to do? It will be another inquiry that will drag on for years to raise issues we already know about.”
Opposition consumer affairs spokesman Sam Dastyari compared Mr Narev’s pay with the 1980s excesses in financial markets while victims of some of the bank’s financial planning and insurance scandals still waited for redress.
“I really do feel like we’re living in the 1980s film Wall Street,” Senator Dastyari said.
After last week announcing a $9.45 billion profit, the CBA yesterday revealed Mr Narev’s annual pay, including leadership awards, had reached $12.3m.
It was almost $5m more than the $7.6m paid to former ANZ chief executive Mike Smith in his last full year at the bank and more than double that received by NAB’s Andrew Thorburn.
Nicholas Moore, who heads up investment bank Macquarie Group, was paid $16.5m last year.
Former cabinet minister Eric Abetz blasted the payment to Mr Narev but said it did not justify a royal commission into a banking sector that was the “envy of the world”.
“Most Australians would scratch their heads and say if the Prime Minister gets half a million dollars, who is running the biggest show in town, how on earth are these sorts of payments justified?” Senator Abetz told The Australian.
Mr Entsch said Mr Narev’s $12.3m payment indicated the vast financial resources available to the banks to spend on lawyers in legal challenges launched by aggrieved individuals.
“If ethical investors are buying into these big organisations, are they comfortable that some of their profits are being drawn from money that has been screwed out of victims?” he said.
“There have been some serious criminal acts committed by the big banks and we don’t need a royal commission to tell us that.”
In his bid to create a tribunal, Mr Entsch has the support of Nationals senator John Williams and South Australian Liberal senator David Fawcett, who recommended a similar committee in a report of the parliamentary joint committee on corporations and financial services released in May.
Slamming Labor for having “no clue” about the terms of reference for its proposed royal commission, Mr Entsch said the tribunal would be a better alternative as it would focus on victims and provide penalties for banks who were found to have done “the wrong thing”.
“I have listened to the Labor Party and if I was going to have a royal commission, my royal commission would be exclusively on the victims, but what is the royal commission going to be for the Labor Party?” Mr Entsch said.
“They haven’t got clue, they just think there is some sort of political benefit there but they don’t know what they are going to do. The Labor Party are wanting a royal commission for the sake of a royal commission, and I think there is a far better way to focus on the victims. I am going to be pushing very hard for the tribunal in the first instance. That is my preferred way of going about it, because at the end of the day it is all about the victims, not about the bloody banks.”
The report from the Senate inquiry, chaired by Senator Fawcett, recommended lenders should engage independent experts nominated by the Australian Small Business and Family Enterprise Ombudsman to examine contentious cases critically to determine whether victims should be compensated.
It also advocated for the Ombudsman to act as a tribunal to consider contentious cases.
“Evidence showed that the actions of various stakeholders in this process, particularly the banks, have unnecessarily cost many small business owners not just their livelihoods but in many cases their homes, health and the breakdown of relationships,” Senator Fawcett said following the release of the report.
Senator Williams, who has led the attack on the banks over their treatment of financial planning scandals, said he had discussed the alternative tribunal recommendation with Mr Entsch yesterday.
“We agreed we need to talk to our superiors about it and kick it along,” he said.
Senator Williams said he had been calling for a royal commission for seven years, but ultimately just wanted the system fixed. “The problem we have in this country is that if you want to seek justice but don’t have any money, you can’t,” he said.
“You can’t fight long, expensive court cases without money. The current system may well be fair, but it’s bloody expensive.”