One of the sneering jokes passed around business circles after mining giants BHP Billiton and Rio Tinto announced they would not pay a cent this quarter under the Gillard government’s pathetic mining tax was that the government would have collected a fat cheque had it levied a super profits tax on the big banks instead.
Despite the decline in commodity prices and the waves of economic uncertainty from Europe, Australia’s four big banks continue to make huge profits. Their combined annual profit will exceed $25 billion this year.
Just $5 billion of those bank profits would fund a full transition to renewable energy at Port Augusta, where the local community is campaigning to replace two ageing coal-fired power stations with wind and solar power.
That is just 20% of the big four’s profits from one year. Imagine what more could be done in terms of investment in other socially and environmentally needed infrastructure?
Imagine if the billions of dollars directed by banks into destructive and speculative investments — from arms trading to uranium mining, coal and coal seam gas mining or building more casinos for the Packer family — was directed instead into public transport, housing, schools and hospitals?
Our future would be fundamentally reshaped — and for the better.
But to do this, the banks would have to operate as not-for-profit community services run under the democratic control of the community.
Under the present system, the four big banks gather the bulk of society’s savings (gouging us with ridiculous fees in the process) and then systematically misdirect it into investments that are bad for our common future.
For example, last week the National Australia Bank paid $115 million to settle a class action taken by 15,000 individuals and businesses that claimed they lost $450,000 of their savings because the bank invested it in dodgy “collateralised debt obligations” during the global financial crisis. NAB wrote off $1 billion in such gambles.
And this is just a tiny part of the big banks’ misdirected investments. We think this should stop. Is that really too much to ask? Is it really such an outrageous and dangerous idea?
It is to those who believe the small minority that control most of society’s wealth and resources have a sacrosanct right to continue their destructive ways.
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