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Katter: Entsch is dogging it and here are my Terms of Reference for Royal Commission into the banks
KAP member for Kennedy, Bob Katter was the first Member of Parliament to call for a Royal Commission into the banks over a year ago on the 15 May 2015:
16 August 2016
Mr Katter will be voting for a Royal Commission into banking and is disappointed, neighbouring Member for Leichhardt; Warren Entsch has back-flipped on a Royal Commission,
“Entsch is dogging it. Entschy, I plead with you to reconsider this idea of the Tribunal. We need the Royal Commission.”
Mr Katter says there are four critical issues that must be addressed in a banking Royal Commission:
“#1 Australia has recourse lending on housing and the Americans have non-recourse lending.
Recourse lending removes the responsibility of prudential oversight.
“In America the bank can only get the house back they can’t get the debt back. So if they have been irresponsible and given you money to buy a house for a million dollars, and the house is only worth $100 000 dollars, they take as much pain as you.
“And after all a house buyer hasn’t got the in depth knowledge that the bank does about the value of a house. Our banks skited about how they came out of the GFC intact. Yeah they did, it was over our dead bodies. In America, the banks shared the losses. In Australia the house buyer took the whole loss.
“#2 There is a very real question about the legality of banking since they now sell-on the mortgages. The load is a contract between the bank and the borrower but the bank no longer owns the mortgages. Are they still a party to the contract? And a number of other forensic questions arise.
“#3 Where the Reserve Bank rate is set around 1.5 per cent the banks are lending over 5 per cent. This is amongst the highest margins anywhere in the world.
“#4 In business loans, particularly in farming and pastoral, the banks have lent money that bears no relationship to the earning power of the business.
“But the overall picture is one the massive profits, obscene salaries for CEO’s as exemplified by “CBA’s Chief and his $12.3 million pay packet.
“In the late 1990s banking CEO’s were paid in the $700,000s when the Average Weekly Earnings (AWE) per annum were about $30,000 .
“Now AWE is 75,000k a year and salaried banking CEOS are over $8 million plus! “Quite frankly a plumber is more valuable than a bank CEO.
“The banks performance has been appalling. They have inflated house prices out of the price range for ordinary people. They have lent money where it should never have been lent and again and again acted in complete breech of the contractual obligations
“People have been meeting their interest and repayments and they are still sold up by the banks even if their contracts say they can’t.
“We have legal recourse what use is that, some little Joe in the street taking the colossal might of the bank to the High Court? Laughable.
“The banks have to accept some significant blame for the decline of the Australia’s economy.
“Our national debt skyrocketed 50 per cent in the last 50 years. The deficit on the current account which creates our indebtedness has doubled in the last 3 years. In other words, the massive debt is increasing at an alarming rate.”