SPEECH TO MEETING OF STORM FINANCIAL CLIENTS

_{28 January, 2009}

Sign Up for free e-mail updates!

Mark and NoeI, the Joint Chairmen, Les Tyrell, Bob Katter, Ladies and Gentlemen.
I am here tonight to indicate that both I and Peter Lindsay support you and want to help in any way we can.  Peter sends his best wishes.  Unfortunately he is out of town tonight on Parliamentary business but he has sent along representatives in Steve Hawker and Murray Hurst.

I know many of you have already spoken to Peter; many of you have spoken to me as well.  I know a lot of you in this hall and I know that you are the sort of people who, over many years in the past have worked hard to make sure that you are able to retire in comfort and you have done that.  Many of you have proudly looked after yourselves and have never taken a cent from the Government.  Many of you have put your lives at risk in the defence of our country and it is an awful thing to see and hear you here tonight in this situation.

The investigation into Storm and the various banks that supported them will go on for many weeks, months and even years.

I would urge all of you to seek your own legal advice.  From your own local solicitor or from Damian just to understand your own position.  I know many of you won’t have much money but explain this to your solicitor, or Damian, and just get an idea of where you should be going.

The banks in Australia really do need to take a reality check of their operations and their position in the Australian Commercial scene.

From reports in recent years, you would know that the CEOs of these banks and their middle order operatives are getting pay cheques and bonuses each year that amount to more than our Prime Minister gets in a year as a salary. 

I suspect that as you all move through this investigation that it will be found that many of the banks will have documentation that is legally correct.  I suspect that if I read my own housing mortgage document,  which I haven’t done for a long time, I would probably find out if I read the fine print that, tomorrow the bank can come in demand payment of the whole of my housing loan and if I didn’t pay within a certain period of time, foreclose on me. 

I think that is the way that documents have been for years but the system has always worked because of goodwill and cooperation between customers and banks.  You might recall in the old days there was a relationship between the bank and customers.  Banks valued their customers and customers were loyal to their bank.  But with the de-regulation of the early 1990s, banks could make more on the overnight money market than they could probably make from all the interest they have charged on all the mortgages in Townsville in any one year.  So customers seemed to become less important.

But ladies and gentlemen, you will recall, a couple of months ago that the banks came begging to the Government to guarantee their deposits because they were frightened if that didn’t happen, there would be a run on the banks and the banks would go out of business. 

Your Government bailed them out to the extent of a prospective 600 - 700 billion dollar guarantee, not million, $600 - $700 billion guarantee.  When I say your Government bailed them out, I really mean you, because Governments don’t have money, they just spend your money.

It behoves the Commonwealth Bank, the Bank of Queensland and any other bank which have been involved on your loans and in your affairs in recent times, to do the right thing by you, not the legal thing, but the right thing.  And just as the banks have come to the Government wanting the Government to prop them up in these difficult times for the banks, then so too should the banks be doing the right thing by you in helping you in these difficult times.

John McLennan indicated to you earlier on that the banks can sometimes get nasty, and John has a litany of stories about how they chased him to his own personal and, I guess, commercial peril.

If anyone here has any indication of any of the banks being nasty and unconscientiousable to any of you for taking them on, as many of you will over the next few months, and perhaps even years, I want you to let me know.  I would ask that if you do get instances of that capricious and unconscientiousable conduct, you should contact my office with details.  I can’t do anything about it with the banks but I can raise it in Parliament and as someone said earlier, the Court of Public Opinion is a very, very powerful weapon.  And if a particular bank has a number of instances where they are simply doing the wrong thing and they are mentioned every day in Parliament, then you may get some relief from their capricious actions.

The banks, ladies and gentlemen, do depend upon the whole system to keep operating and you are part of that system.  I want to help you in any way I can through the Parliament.  I don’t want you to have any heightened expectation that we will be able to do things.  There is no silver bullet but I am very happy to have Senate Committees or Parliamentary Committees if they achieve something.  I suspect that if there are those Parliamentary enquiries they will be looking at how to fix the banking system in the future and to make sure that what happened to you doesn’t happen to others in the future. If we are able to do that then I am very keen to help.  But it may not be of any direct assistance to you in your present circumstances.

I have spoken to Malcolm Turnbull today and, he is very keen to see transparency in the whole Storm Financial and banks situation.  What that means really is that it needs to be all out in the open. And whether the right way to do that is by Senate enquiry or a Parliamentary enquiry or an ASIC enquiry or a Royal Commission or any other sort of investigation then that’s something, I think, that has to be assessed as the position becomes clearer.

What I can tell you is that Parliament sits next week and the following week we have what is called Senate Estimates Committees.  ASIC does appear before Senate Estimates Committees and so in 2 weeks we should be able to get some idea of where ASIC is going.  Now as a former Minister in Government, I don’t want to put ASIC officials in a difficult position tonight and you know there are ASIC officers here.  They are Public Servants, they’re there to do a job and follow the law, I think they are going to make a statement later, just indicating what they can do.  But, I do want to ensure that ASIC are properly funded and have the necessary powers to properly look into your situation in the hope that in some way you may get some redress as John mentioned occurred with many people in the old Westpac Foreign Loans Scandal some time ago. 

I am giving ASIC notice now for 2 weeks hence. I mentioned this to the officer before, because I know they are constrained in what they can say publicly.  They may be constrained in what they can tell a Parliamentary Committee in 2 weeks time if there is an investigation in play. But I want to know what exactly ASIC is doing, I want to know if it has the necessary powers and resources, I want to know what is its plan, I want to know what remedies perhaps ASIC can take and what responsibilities banks have in retail lending transactions. 

This, I think, will be, perhaps, the best and earliest way in getting the public accountability that we need - to get it all on to the table.  I also want to give to the banks, notice that they should work their hardest with their clients to find a solution. There are some horror stories that have been mentioned tonight and that you’ve been reading about in the papers over the last month or so.  But foreclosing too soon, selling people up quickly, in the end result, shouldn’t happen because it doesn’t help the banks who will be out of pocket by a lot of money at the end of the day because of rushed sales of assets.

I again repeat that you, as taxpayers, through your Government, have guaranteed the National Bank and the Commonwealth Bank and Westpac and the ANZ Bank to the extent of $600 - $700 billion.  They didn’t hesitate to come to you, through your Government, when they needed help and it seems to me now that you people are in a situation where you deserve a little bit of consideration from the banks who are expecting so much from your Government, and from you, through your Government.  

I want the banks to clearly understand that.  I asked Damian and your Joint Chairmen earlier would anyone have any idea of the extent of the loss that there might be in this room and in the rooms in Margate and other places around Queensland where there are more people like you.  Nobody really has any idea; some guesses at $100 - $200 million, it may be more than that.  But when you compare that against $600 - $700 billion for which the banks are reliant upon you through your Government then it seems to be little to ask that the banks shouldn’t be going out of their way to make things easier for you.

To get to the bottom of this fiasco and help you in every way we can, that’s what I and Peter Lindsay, Bob Katter, John Williams and others of my colleagues in the Federal Parliament will be trying to do.

And finally, can I just say to all of you, please don’t give up hope.  Things do look bad at the moment, but there are always better days ahead.  Hang in there, there will be a lot of assistance around, a lot of counselling advice around provided by Government and the Agencies.  Please take advantage of that.  Again, if any of your Parliamentarians in this community or in any community can, in any way help, please don’t hesitate to get in touch with us and we will do what we can to help you to speak to the right people, to get the right counselling and we will try to keep this issue alive so that the banks do work with you to resolve the situation. 

Try to keep smiling.

More Speeches