For too long, the big banks have been taking Australians for a ride. They’ve become less like the banks we remember and more like convenience stores: spruiking loans, super, insurance and financial instruments so complex you need a PhD just to understand what they’re for. Everyone knows that this leads to conflicts of interest that are bad for our economy, but it also leads to mega-profits that become big political donations, so neither of the two old parties want to do anything about it.
These massive financial services corporations and their CEO’s have done everything in their power to make sure that they can keep selling you their own shonky products even when they know full well they’re not in your best interest or that you could get a better deal somewhere else. They’ve rigged the game against you and bought off the referees who are meant to keep things clean.
In the best of cases, these financial services giants are blindly giving you bad advice. But as we’ve seen in the Royal Commission, in many cases it’s been much more sinister: fraud, lying and the worst kind of unchecked greed let loose on the pensions and savings of hard working Australians.
Look at what happened to Jacqueline McDowall. She wanted to buy a bread and breakfast to retire from nursing and settle down. So she went to her trusty Westpac financial planner, who advised her and her partner to combine their super into a self-managed super fund to purchase and run a B&B. But instead of a dream retirement, she lost her family home and found herself in a nightmare.
“I felt that going through a big bank like this, that you would be okay and they would look after you and they would be truthful in answering and taking on board what you wanted to do with your financial money,” she told the Royal Commission.
“I just felt after that that we had been led up the garden path and lied to, just for the Westpac bank to get their bit of the insurance, which were now being taken from our super funds.”
It’s time that banks became banks again. That’s why the Australian Greens are proposing a fundamental overhaul of our banking and financial services sector, as well as the regulatory and governance system underpinning it. You can’t trust Labor or the Liberals to do it - they’ve got too much money to make from keeping their corporate masters happy.
The Greens led the charge to establish a Royal Commission into the banking sector and we are the only party with a real, simple solution to the abuses it has uncovered: break up the banks.
Under the Greens proposal:
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Banks will no longer be able to own wealth management businesses that both create financial products and spruik them to unsuspecting customers.
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Consumers will be able to easily distinguish between the simple and essential products and services that the vast majority of Australians use—deposits and loans, superannuation and insurance—and the more complex and selective activity that is the domain of big business, the wealthy, and the adventurous.
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By removing hidden conflicts of interest, Australians will be able to trust that the advice they're getting from their banker is designed to line their own pocket, not the other way round.
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The watchdogs have failed. We would strip ASIC of its responsibility for overseeing consumer protection and competition within the essential services of basic banking, insurance and superannuation and return them to the ACCC.
Breaking up the banks and reforming the regulators so they work for us again is the key first step in fixing a financial services sector that is rotten to the core. It will end customers being taken advantage of by dishonest banks and make sure the watchdogs are working for the people they’re supposed to be serving, not the ones they’re meant to be policing. Join the Greens in bringing back banking in the common interest, not the corporate interest.