The Banking Royal Commission
The scandals being uncovered by the banking royal commission are appalling, but should we be surprised? The financial sector not only comprises a significant component of the national economy but sets the standards by which the daily transactions of life are conducted in Australian society. The sad reality is that profit and ‘success’, so lauded in the finance industry over other values, has become the normal standard in almost all boardrooms and in so much that passes for commercial transaction in day to day life.
The commission into Child Sexual Abuse aside, the politically motivated royal commissions of recent times have been ‘Much ado about Nothing’, but not this one. The findings have been quite horrifying. But are we, or should we, be surprised? Much that is being revealed has been around in anecdotal narrative for some time. In stark contrast, those of us who are old enough will remember a time when the Commonwealth Bank was publicly owned, and no matter which bank enjoyed our loyalty, the bank manager was revered. We trusted the bank to be there to serve us in good times and bad. Why has the culture done a U-turn?
We now instinctively know we, the customers, are no more, but no less, than a pawn of the bank’s wealth accumulation strategy and that the banks exist to serve their shareholders.
But is this simply a problem of the banks or of the finance industry more generally? I put it to you that it is the latter, and that the banking royal commission is acting as a lightning rod into the parlous state of civil society, a state all of us have fallen into.
Allow me to set the scene:
- Profit is everything, the rewards for having produced an outstanding balance sheet are considerable. The bonus system carries within it an irresistible inducement to act unethically. Results which exceed the rate of inflation by a considerable margin are not necessarily the result of productivity or hard work, they have often been the result of someone else’s loss. Hedge Funds operate on the basis that there is money to be made from other’s ill judgement. Hedge Funds do not produce, they harvest capital from one source, capturing it to another vault.
- Winning is everything. We are all recovering from the national shame of a ball tampering episode. How could it have come to this? Not at all hard to explain. Winning is everything and the financial rewards for doing so are monumental. It was hypocritical of politicians, including the Prime Minister, to engage in the shame game when all that is exemplified from parliament is their own version of ball tampering for political self-interest.
- Taxation robs resources from the private sector into the public arena and therefore can be legitimately avoided at all costs. It is an indisputable reality that millions, probably billions, are invested every year in tax avoidance. We know that many large companies have so arranged their affairs that they pay no tax at all and yet are looking forward to a reduction in the rate of ‘company tax’. Taxation should be embraced as the incontestable obligation of all to contribute to the common good of a harmonious and just society. We are currently far from this position.
- Private ownership is good, public ownership is bad. We have made essential services captive to ‘for profit’ enterprises. Essential services should not have legitimate expenses minimised and profit maximised for profit hungry private enterprises. Gaols should not be places in which rehabilitation is compromised, or refugee compounds places where health, education, and general care fall below the standard acceptable within the general Australian population. We appear to have reached a point in Australian political life where nothing remains in public hands as a matter of principle. When I lived in Canberra many public servants were made redundant under the Howard purges. The ones in my street left with a redundancy package on Friday and renewed their old job on Monday on a private contract at a higher rate. Quite apart from the loss of corporate memory there are very good reasons why many key areas of Australian life ar more appropriately and effectively administered by the public service. Privatising ‘poles and wires’ has not contributed to cheaper electricity – quite the contrary.
- Independent regulation is bad, self-regulation is good. This extraordinary situation is promoted most strongly on the right of politics, and most fully by Libertarians like Senator Leyonhjelm. Libertarians believe that any interference or restriction placed upon the affairs of individuals is an unwarranted intrusion into their lives. Society is made up of individuals, so they argue, who must be allowed to get on with their lives and in so doing contribute to society as a whole. The false premise of this position is that the complexity and interrelatedness of life means of necessity we are all accountable to one another for the common good. The failure of the regulator to do its job in the banking industry is obvious, almost criminally obvious, for all to see. However the monumental failure of regulation has been in the environmental area. Future generations should bring a class action against the present crop of politicians for this failure. The French President, Mr Macron, now visiting Australia, has appealed to both sides of politics to get over their party political gamesmanship on this matter, reminding them there is no planet B. It should come as no surprise that those who have opposed proper oversight of climate responsibility are the same as those who have opposed investigation of the banking industry.
- The wealthy are self-motivated and hard-working, the poor only have themselves to blame. This explanation, perhaps justification, for inequity is one of the greatest threats to the future of an harmonious civil society. Racial prejudice and the capacity to scapegoat, is closely connected. That more than a quarter of the prison population is indigenous, that mental health is a great contributor to homelessness and gaol, that the poor go through gestapo like interrogation to justify claims whilst politicians and senior bureaucrats stretch the rules to embrace theirs; all these and many other facts are indicators that winner takes all, and the loser can simply stand aside.
Considering these realities, a civil movement is called for, to which people in their millions might associate their name, which says “enough, turn around, we are going the wrong way”. This movement could begin within communities of faith, but does not need to. It needs to be led by respected figures such as the economist Allan Fels, and the Chief Scientist Alan Finkel. It needs to stand outside conventional politics, certainly not to be captured by any party. It is a cause for which the name Monash could be attributed. It is a movement which should attract well motivated philanthropists such as Dick Smith.
Above all, we need a movement which ordinary Australians can embrace. Stay on the track we are on and the faults of our current society will be exaggerated in the next generation, stand up and a different path will take us to a platform where mutual trust and service for the good of each other within civil society will once more become a possibility, if not the norm.