Radio Interview: Banking Royal Commission, Bank hearings

Dec 6, 2016

PAUL BEVAN: One of the committee members, one of the inquisitors is the Federal Member for Shortland Pat Conroy and Pat Conroy is with me now. G’day.

PAT CONROY, SHADOW ASSISTANT MINISTER FOR CLIMATE CHANGE AND ENERGY: Good afternoon.

BEVAN: Were you able to achieve much this afternoon with the Commonwealth Bank?

CONROY: Not really to be honest, I think the three hours led to more questions than answers unfortunately. Again, it demonstrates why we need a much broader inquiry into the issues. We did establish for example that no one has been sacked over the CommInsure scandal; a scandal that has seen many people in awful circumstances exploited by the Commonwealth Bank.

BEVAN: Let’s have a look at the principal things people would like to know. They want to know why the interest rates, given the profitability of the banks, are not passed on in full. Did that get an answer or did it get asked?

CONROY: It definitely got asked and the answer was along the lines of ‘we have increased costs that we need to account for’ and in the end we didn’t have the ability to call independent experts, other economists who could really talk about the nature of the system. We only had twelve minutes of questioning so it’s very hard to get into any depth on an issue really.

BEVAN: Given that they have multi-billion dollar profits though how deep do you have to delve into how much they can afford to pass on the interest rates it’s not that difficult to get them on the spot is it?

CONROY: Well it is when they claim everything is commercial in confidence. I, for example, tried to ask a simple question about what the level of profits are on home loans and credit cards these are key issues where people are saying they’re ripping off consumers massively and Ian Narev the CEO hid behind commercial in confidence and the committee Chairman a Liberal MP intervened to stop me requesting those documents. So it’s an example where a Royal Commission would have the automatic ability to call those documents, instead all we can do is ask the banks nicely and if they say no we have very little recourse.

BEVAN: One of the other issues that people would be interested in is life insurance and compensating people fairly when they have been caught in the past when they have been acting so inappropriately when it comes to life insurance. Did you manage to get anywhere on that question?

CONROY: It was very unsatisfactory to be honest I spent the majority of my time exploring this issue of CommInsure and examples of people who have been diagnosed with a terminal illness not being paid life insurance, people who’ve had heart attacks saying they didn’t meet the definition of a heart attack and Mr Narev was relatively elusive in answering those questions. I finally got him to acknowledge no one had been sacked from his organisation over these scandals and I think that’s appalling we’ve had people’s lives ruined by the Commonwealth Bank and as far as I can tell there’s been very little change in that organisation, just no accountability.

BEVAN: Would it necessarily be a firing offence if what you were doing were in the parameters stipulated for you if you’re fundamentally doing your job and getting your benchmarks and your KPIs why would you get sacked?

CONROY: Well this is one of the issues – that the bank employees are being paid incentives to [inaudible] just to purely look after profit. But some of these cases are outrageous one of them that I explored today which popped up on the 730 Report last night was a woman whom unfortunately died of an accidental drug overdose. The Coroner ruled an accidental drug overdose the death certificate ruled accidental drug overdose but the CommInsure assessor said suicide. So this woman’s family have not been paid out because this assessor at the Commonwealth Bank said they know more than the Coroner about what happened to this poor woman this is an example of an incredibly toxic culture within our banking sector that we need to take action on.

BEVAN: The medication wasn’t hers though is that where the complication comes in?

CONROY: No, no, well there’s a secondary issue which is would the claim be paid on the basis if she took that medication that wasn’t prescribed for her and that’s another matter and that’s very legitimate. But there’s no way the Commonwealth Bank should be deciding whether this is suicide or not; that is up to the Coroner. It shows the culture of these organisations that they directly contradicted the finding and what was put on the death certificate. So, there’s a secondary issue that’s very legitimate and the bank has a right to go down that path but they didn’t even get there they said it was suicide which was an appalling treatment of this woman’s family.

BEVAN: So you were unable to find out when the victims would be compensated and when these things would be resolved?

CONROY: It very much was a ‘trust us we’re working on this’ it’s all a work in progress which is pretty unsatisfactory I think as I said these three hours has just led to more questions than answers. There’s even a local angle I pursued around a Salt Ash resident being asked by their bank to pay more interest on their mortgage because of the groundwater contamination, where again the bank really refused to really comment on it.

BEVAN: So it sounds like you being one of the Labor members on the committee are going to, as the committee continues to go through the other banks, continue to say ‘this is inadequate what we need is a Royal Commission’ do you anticipate that is going to be the outcome?

CONROY:  Well I’m going to continue to do my best to maximise the information available to the Australian public and the people of the Hunter in this process, that’s my first job. But unfortunately the first three hours of the hearings have demonstrated we do need a Royal Commission to get to these issues. But my first is to use the committee process to understand what has gone wrong in the banking sector and I’ll do that but unfortunately as I said this has raised more questions that only a Royal Commission can answer to be truthful.

BEVAN: Okay, Pat Conroy thank you very much.

CONROY: My pleasure, talk soon.

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