How Anna Bligh’s Australian Bankers Association coup was sealed

The Australian 12:00am May 26, 2017

Pamela Williams

It was early on a Friday morning — February 17 — that National Australia Bank chief executive Andrew Thorburn picked up the phone to call Labor’s Treasury spokesman, Chris Bowen.

This was a prearranged courtesy call and Thorburn had startling news for Bowen: Anna Bligh, one of the fighting machines of the Labor pantheon and a former Queensland premier, had been appointed chief executive of the Australian Bankers Association — the business lobby group ­focused on blocking Labor deman­ds for a royal commission into the banks.

Bowen was astonished. “Well, I’m hard to surprise these days in politics, but you’ve managed it,” he told Thorburn. He added: “I suspect that if you haven’t spoken to the Treasurer yet, you’ll get a colder reception than from me.”

Scott Morrison was on a plane bound for New Zealand that morning. Thorburn left him a voicemail message on his phone; and a message for Morrison’s chief of staff, Phil Gaetjens.

But Morrison already knew about Bligh. The night before — February 16 — NAB’s general manager of governm­ent affairs, Dallas Mc­Inerney, had phoned Morrison’s communications chief, Sasha Grebe, to put in place arrangements for Thorburn to contact Morrison the following day. Grebe immediately went to Morriso­n — to tell him the banks had appointed Bligh.

It was a revelation that would have unforeseen consequences. Grebe himself had put his hand up for the ABA job, and had been called by headhunters Heidrick & Struggles just that morning — to say he had been unsuccessful.

Once the cat was out of the bag, it set in motion a cascade of events that propelled the Bligh appointment onto the front pages and into gossip columns for days.

Grebe, with a young family, had wanted more time in Sydney and raised with Morrison last year his interest in finding a new job.

When ABA chief executive Steven Munchenberg announced last October he was stepping down, Grebe turned his eyes to this.

A number of banking and business top dogs were willing to support­ him. ANZ chairman David Gonski made at least one call on Grebe’s behalf early in the piece, to ANZ chief executive Shayne Elliott. Business Council of Australia chief executive Jennifer Westacott made calls on Grebe’s behalf, as did Westpac direct­or ­Craig Dunn.

Grebe was never interviewed; but Heidrick & Struggles partner David Scambler advised him the day before the public announcement on Bligh that the successful candidate had been favoured from the start; all four big-bank CEOs had signed off on the decision.

After a weekend of headlines about Bligh and the response from Morrison’s office, the situation became­ untenable. Grebe abruptly resigned from the Treasurer’s offic­e on the Sunday.

At the very least, Bligh was a provocative appointment. She was no entry-level politician or polit­ical adviser. She was dyed-in-the-wool Labor, and had climbed to be premier. She was a former ALP federal president. She remains a Labor Party member.

In Coalition circles, Bligh’s appointmen­t was seen as opportunistic ballast against Labor’s demand for a banking royal commis­sion; it was seen, too, as stinging affirmation that the banking industry was betting on a Labor government after the next election.

And yet the Turnbull government had taken considerable heat on behalf of the banks. With a one-seat majority, Malcolm Turnbull had bashed Bill Shorten over the royal commission demands; the government had instituted a rash of public inquiries and new policies to force bank accountability, to fend off Labor pressure.

Protecting the standing of the banks, and the concurrent importance of these institutions to the financi­al health and stability of the nation, had been a priority and a position of principle for both the Prime Minister and Morrison. Suddenly, with not so much as a heads-up, here was Bligh, a card-carrying Labor star, to be introduced into the most confidential discussions between government and banks. A falling tree could not have sounded more loudly.

It was not just conservative circle­s that were stunned. Plenty of business figures and experienced lobbyists felt a less confronting candidate could have been found. Appointing an arch-enemy of ­conservatives was interpreted as a sign that getting into Labor’s good books mattered most. It may have been entirely wrong, but that first impression held.

Some old Labor hands had bitter­ words too, notwithstanding many politicians from both sides going on to become lobbyists. “It’s just not something you’d expect from someone who has enjoyed the highest echelons,” said one former­ Bligh colleague caustically. Another, former Queensland housing minister Robert Schwarten, accused Bligh of selling her principles.

Thorburn, as chairman of the ABA, led the shortlisting process, but all four CEOs of the big banks agreed on Bligh, together with the ABA deputy chairman and Ben­digo Bank boss, Mike Hirst.

Thorburn is more than happy with the outcome. His brief to headhunters was direct: the industry was at a pivotal point and ­needed a different voice, with experience. “There was a very clear process and total support for her appointment,” he says. “We wanted a new, strong leader who would connect with the community and consumers — and would be strong enough to challenge us. And everything I’ve seen since says she’s the right person for the job.”

Bligh says she was first approached­ in mid-November last year when Scambler called to propose­ a “left-field” idea.

Bligh said she didn’t want to waste her time or the banks’. How serious was this? They met soon after. The headhunter outlined banks’ concerns to deal with their reputational issues and an escalating regulatory environment. They wanted to become proactive and they wanted a chief executive who might symbolise change.

Bligh had interviews with Thorburn and Hirst before Christmas. She agreed to think it over and come back to them in January. She had as many questions as she was asked. She says she did not ­discuss the job with anyone in the federal opposition.

In January she agreed to throw her hat in the ring. Thorburn arranged­ for her to speak to the other big four chief executives. They discussed with her the stand she would need to take against a royal commission; they were happy with her response. After these meetings she met Thorburn again and he offered her the job.

The recruiters had had a short-list of a dozen. This was whittled down to eight and then three who were interviewed by the head-hunter. Thorburn and his chief executive colleagues interviewed only one: Bligh.

The banks kept the name of their new recruit quiet. They knew they courted controversy but believed­ it was manageable.

Thorburn rolled out his announce­ment on February 17. He phoned the Treasurer, leaving a message; he called Morrison’s chief of staff; he spoke to Bowen; he left a message for Shorten; he called the two top regulators, Greg Medcraft at the Australian Secur­ities & Investments Commission and Wayne Byres at the Australian Prudential Regulation Authority. It is understood the news was well received by both. He called ­Finance Minister Mathias Cormann and several bank chief executives outside the big four.

Treasury secretary John Fraser heard about Bligh’s appointment in the media; so did numerous banking executives. Even the corporate affairs divisions of the banks, with the exception of NAB, were said not to know until they read the Margin Call column in The Australian on February 17 — which was tipped off before Thorburn phoned Morrison.

Such was the impact of Bligh’s name that when Morrison announ­ced a $6.2 billion revenue-raising levy on the banks in the May 9 budget, speculation bounced around that it was revenge­ for Bligh. But the levy had been under serious consideration for months and had been a detailed­ proposal to the expendit­ure review committee.

Thorburn had wanted someone who could “cut through”, to help banks change negative ­perceptions and fend off public support for Labor’s royal commission. But after the budget what he got was pure politics, as the banks were immediately off on a campaign­ of attack on the government, with Bligh in the lead.

If Bligh’s appointment had hit a sore spot with government, what followed fuelled the irritation. One business leader described the whole appointment process as having gone awry — with a number­ of banking executives outside the chief executive circle privately concerned about installing a former Labor politician at the ABA when the government has two years to run.

Another remarked that “only bankers could pull this off”. The issue was perhaps less Bligh ­herself than enabling those who would deal with her to adjust to the shock before such a provocative pick became­ public.

Morrison, after receiving Thorburn’s message on his phone as he flew to New Zealand on February 17, did not return the call until the Monday. On the Saturday morning, Thorburn called Turnbull — a call some have described as an attempt to remediate the situation.

There were already small schisms between the NAB and the Coalition. It had not gone unnoticed that, following the advent of former Treasury secretary Ken Henry as chairman in December 2015, NAB revealed six months later that it had banned itself from making political donations.

The biggest impact was on the Coalition, which had long received the lion’s share. There were angry background mutterings that this was a “Ken Henry special”.

Annual returns lodged with the Australian Electoral Commission show that, in 2014-15, NAB donated $239,686 to the federal Coal­ition and $35,600 to Labor. AEC returns reveal donations to the federal Liberals in 2015-16 as: nothing from NAB, $100,000 from ANZ, and $27,500 from each of Westpac and CBA.

Bligh has met the Treasurer since her appointment. She also met Fraser and deputy secretary John Lonsdale the day after the budget — an appointment she made before the budget.

She has held one meeting with Bowen, where they discussed the royal commission. Bligh has spoken­ to Bowen by phone several times; they have been in contact since the budget. Were Bligh not Bligh, this would go unremarked. But, for the government, learning to trust the new ABA chief may take some time.

The banks contended loudly they had been in the dark about the levy. There was no reason for consultation, given market implic­ations and market sensitivity.

But there was another prism: Thorburn had arranged to phone Morrison to reveal Bligh’s ­appointment on the same day that it was publicly announced. So too, Fras­er made an appointment to call the chiefs of the big four banks on the night of the federal­ budget — in the 45 minutes before Morrison announced the levy publicly.

It was either a fine coincidence or it was touché.