The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry uncovered truly horrifying practices in Australia’s financial sector, fuelled by a toxic culture of greed, chicanery and outright lies.
It seriously challenged the social licence of many of Australia’s most august banking institutions and a new distrust and wariness replaced many Australian’s former confidence in this vital sector of Australian society and economy.
Headlines were awash with lurid details of exploitation: stories of Aboriginal children being sold funeral plans, superannuation firms charging fees to deceased customers and disabled Australians conned into debt traps.
The Hayne Royal Commission was meant to have closed that chapter in the history of Australia’s financial services industry and ensure a clean break with the bad habits and culture of the past and the establishment of a reformed and honest sector of the future.
The Hayne Banking Royal Commission created a public space for the voice of ordinary Australians who had been crying out for help for years, and for citizens speaking truth to power.
But when we don’t have a Royal Commission in progress Parliament must be a representative and reception organ of government. We are here to represent the will of the people and to be responsive to accusations of injustice. The Parliamentary Joint Committee on Corporations and Financial Services has the power, and indeed the mandate, to investigate and recommend solutions to issues in the financial sector through parliamentary inquiries.
Labor’s calls for an inquiry into the much reported, AMP Buyer of Last Resort (BOLR) changes is another case of an investigation, prompted not by lobbyists or interest groups, but by Australian citizens.
I was prompted to adopt this position after hearing deeply disturbing accounts from dozens and dozens of AMP-aligned financial advisers who have contacted my office over the past few months. They have told me that their businesses are now worthless, that these retroactive changes have destroyed their equity, mental health and retirement and that many will be forced out of the profession that they love in the middle of a historic recession and pandemic.
These AMP agents were the face of AMP across Australia, they thought they had safe contractual arrangements with ‘their’ company, but while they were selling AMP, AMP sold them out. How motivated are our biggest financial service providers to do the ‘right’ thing by their own? Not so motivated to that end it would seem.
Trust in an essential ingredient in any successful business. It is even more so in the financial services sector, where Australian’s entrust their life savings and financial future to largely unknown individuals based on their faith in the financial sector and its regulators. Decisions like the BOLR changes only undercut the narrative that we all hope for post-Hayne. We are in desperate need of a culturally changed, more ethical industry.
The Hayne Royal Commission should be a watershed moment in Australian financial services history. We must not let its momentum go to waste. We cannot let the financial services sector drift back to a fraternity like culture, where the abuse of power, the tactics of secrecy, fear, sexism, sexual harassment, celebrated exploitation, and cover up continue to fester unchecked.
I remind readers that the Liberal National Party voted against a Banking Royal Commission 27 times. They engaged in a desperate rear-guard action to protect what can only be described as the ‘old boys club’. It was wrong then. It is wrong now. Sunlight is a powerful disinfectant; scrutiny must continue to be applied to this sector.
It deeply disappoints me that last week the Government members of this committee voted against an inquiry into the disastrous BOLR changes. They chose to protect the powerful AMP and leave the lingering traumatised advisers to the mercies of a long court battle. If AMP can work with Government to evade any serious, sustained scrutiny of their unconscionable behaviour, that sends a signal to the rest of the sector to take their chances. Profit at any price is not commerce. It is exploitation.
The recent exits from AMP’s board by John Fraser and David Murray and the demotion of Boe Pahari show that shareholders and investors will no longer tolerate executives who perpetrate or seek to deny a culture of corporate sexual harassment. I remain concerned about the retention of Pahari in what is still a significant leadership role. I encourage AMP to show leadership by asking the PJC Committee to undertake the necessary enquiry.
Labor believes in an economy that works for all Australians. That is why I, and my colleagues, have championed a Parliamentary inquiry into AMP’s decision regarding its BOLR changes. We want to ensure that those Australians who feel that they have been “done over by the system” can have their say before their elected representatives, and most importantly get back on their feet so they can run a successful business.
A Parliamentary Inquiry into AMP’s BOLR changes will serve as a reminder to all financial services providers will be put on notice that they cannot quietly backslide into old, bad habits. We need to ensure that justice is provided to victims of toxic corporate decisions and that in Australia, the land of the fair go, the small businesses that power our economy will never be easy prey.
Deborah O’Neill is a Labor Senator for NSW and sits on the Education and Employment, Community Affairs and Corporations and Financial Services committees.
