Malcolm Turnbull commits to bank victims' tribunal but Labor calls it a 'stitch-up'
PM says tribunal would resolve complaints faster than a royal commission, but Labor says it wouldn’t address the underlying cultural changes needed to stop ‘rip-offs’
7 October 2016
Malcolm Turnbull has promised to introduce a bank victims’ tribunal, suggesting it could resolve customer complaints more quickly than a royal commission.
The chief executives of the four big banks gave in-principle support for the tribunal at committee hearings into bank scandals in Canberra this week.
On Friday Labor’s financial services spokeswoman, Katy Gallagher, said the opposition was prepared to consider the tribunal, despite labelling it a “stitch-up” to avoid a royal commission on Tuesday.
Turnbull told FiveAA Radio in Adelaide on Friday that the government would introduce a bank tribunal after a review that University of Melbourne law professor Ian Ramsay is undertaking of banking, insurance and superannuation complaint mechanisms.
“We’re working towards one tribunal that deals with consumer claims in a cost-effective and speedy way, to get these matters resolved,” he said.
“We’ll obviously wait for advice from Professor Ramsay’s expert group as to how it should be set up, but we will get a low-cost, speedy tribunal to deal with these types of consumer complaints, customer complaints against banks.”
At a parliamentary committee hearing into the big four banks on Tuesday, Commonwealth Bank chief executive Ian Narevsaid the bank was “very open” to discussions about the tribunal.
“We’re for any work that can be done that allows customers to be heard,” he said.
On Wednesday at another hearing the ANZ chief executive, Shayne Elliott, said it was “a good idea, we have no issue with a bank tribunal”.
On Thursday Westpac’s chief executive, Brian Hartzer, revealed the heads of the banks had discussed the tribunal with the treasurer in April or May but said it had only been discussed “in passing” and he was “not really aware of the details of what is recommended”.
Hartzer accepted there may be occasions where customers are not happy after internal and external complaint-resolution procedures.
“It’s entirely appropriate to look at that appeal framework. I don’t have a strong view about whether that’s a tribunal or something else,” he said.
The NAB chief executive, Andrew Thorburn, said the bank was prepared to work with the government “to make sure the highest standards are in place so that it’s easy for customers, when they have issues and grievances, for those to be dealt with”.
In her questioning on Thursday Liberal MP Julia Banks suggested the tribunal would be “under the auspices of [the Australian Securities and Investment Commission]” and have “strong interventionist powers” to set benchmarks on sales, and mandate ethics and unconscious bias training.
Turnbull said the tribunal was an example of “real action ... dealing with these problems now, not kicking them off into the long grass of a royal commission for years and years”.
He acknowledged that “there have been many cases where consumers have not had the right thing done by them by the banks”.
On Tuesday Gallagher told a press conference the bank tribunal was “another stitch-up” and such a body would only be designed to give the prime minister process “is something that many victims’ organisations and victims themselves would support”.
“It would deal with things at the end, once people have been burned ... once customers have lost their savings,” she said.
“They could ... pursue a compensation scheme of last resort.
“But what it wouldn’t deal with is get to the bottom of why these problems occurred, the culture, the systemic or structural changes that are needed to stop these scandals and rip-offs occurring in the first place.”
On Friday Gallagher told a press conference Labor was prepared to “look at any measure that improves customer access to justice” but said the details of the plan were unclear.
She said there were already three complaint mechanisms that can award compensation, including the Financial Ombudsman Service.
Liberal MP Warren Entsch, a former advocate for a royal commission who proposed the tribunal as an alternative, told Guardian Australia he was “absolutely stoked that the bank executives embraced the concept” of a tribunal.
He said its powers should be “as extensive as is necessary to deal with the problem”.
Entsch reiterated his proposal that the tribunal structure penalties so that financial institutions had to pay triple the amount ripped off from customers, with one-third to go back to customers and the rest to fund the tribunal.
