Banks are hated with good reason

February 6, 2020
Scandalous bank rip offs have been going on for a long time but, until recently, they thought they could get away with it.

Incoming Westpac chairperson John McFarlane has conceded that banks are “hated”, though he blames the industry’s bad image on its pursuit of short-term gains over long-term returns.

The truth is, scandalous bank rip offs have been going on for a long time but, until recently, they thought they could get away with it. No doubt bank managers considered monstrous fees, dodgy investments and other crimes against customers to be part of their long-term, profit-making strategy.

Of course, not all customers are treated the same. Banks have always made sure to look after their biggest customers - and their ill-gotten gains.

The Australian Transaction Reports and Analysis Centre (AUSTRAC), a government agency that monitors financial transactions, has accused Westpac of 23 million alleged breaches of money laundering laws.

Media reports have focused on a convicted child sex offender who sent money to the Philippines via Westpac’s international money transfer system. Yet, most of the $11 billion in suspect transactions were for high-level, cross-border tax evasion purposes.

Macquarie Bank is also being investigated for facilitating tax evasion. ABC News reported on January 24 that German tax authorities were investigating Macquarie Bank’s current and former chief executive, as well as 60 other employees, past and present.

Macquarie Bank was allegedly one of several financial institutions that “exploited a legal loophole which, at the time, allowed two parties to simultaneously claim ownership of the same shares, and therefore claim tax rebates which they were not entitled to.”

German authorities are trying to recover billions of euros lost through this scam.

An Oxfam briefing paper released in January, Time to Care: Unpaid and underpaid care work and the global inequality crisis, notes: "With armies of tax advisers at their service, multinational corporations exploit loopholes in tax codes to shift profits to tax havens and avoid taxes, costing developing countries an estimated $100 billion of lost corporate income tax annually.

“These are financial revenues that are urgently needed for investment in public services and care-related infrastructure.

"Instead, governments are over-relying on regressive consumption taxes like [goods and services taxes], which place an undue burden on anyone living in poverty and on carers...

“At the same time, these are the very people who have limited or no access to the public services that their tax contributions pay for, especially when services are privatised or fee-paying.”

Banks are hated for good reasons: they rip off and abuse ordinary customers while helping their richest clients spirit away ill-gotten gains. In other words, they help keep the poor poor while making the rich even richer.

That is why McFarlane’s comments, reported by The Australian on January 24, that "relentless bank-bashing and punitive sector-specific policies will hit returns and erode the industry's $14 billion contribution to government coffers” simply rub salt into the wounds of the many victims of the banking industry.

Green Left believes we need to do away with private banks and make banking a not-for-profit public service. If you agree, become a GL supporter.

You need Green Left, and we need you!

Green Left is funded by contributions from readers and supporters. Help us reach our funding target.

Make a One-off Donation or choose from one of our Monthly Donation options.

Become a supporter to get the digital edition for $5 per month or the print edition for $10 per month. One-time payment options are available.

You can also call 1800 634 206 to make a donation or to become a supporter. Thank you.