With calls for a royal commission into the banking sector growing, the argument for a new "people's bank" to challenge the domination of the big banks is gaining strength.
A number of recent events have propelled community anger at the "Big Four" — Commonwealth Bank (CBA), NAB, Westpac and ANZ — to the point that a royal commission seems increasingly likely.
The latest in the series of scandals and swindles by the Big Four is the refusal by any of them to pass on the full 0.25% interest rate cut handed down by the Reserve Bank on August 2. Instead, most of them passed on only half the cut to mortgage holders, which could leave the four of them with an estimated bonus profit of almost $1 billion.
This was followed by CBA's August 10 announcement of a record profit of $9.45 billion for the last financial year. Its return on equity was 16.5%, well in excess of the 11 to 12% that is typical of companies listed on the stock exchange, and the 10% or less return that UK banks generally receive.
On top of this, CBA chief executive Ian Narev pulled in a tidy $12.3 million salary for his efforts in ripping off the bank's customers and boosting profits — up from $8 million last year.
The contrast between bank CEOs' monstrous salaries and the stagnant wages of the majority of Australian workers is stark.
Even commentators in the corporate media are starting to reflect widespread public hostility to the big banks, with journalist Peter Martin penning an article in the August 4 Sydney Morning Herald headed: "The banks rip us off with impunity."
He noted: "No other Australian businesses, with the possible exception of Telstra, act as if they have the right to maintain their historical profits, no matter what."
Adele Feguson, writing in the August 13 SMH, outlined the findings of a 2014 Senate inquiry, which recommended a royal commission into the CBA "to investigate fraud, forgery and allegations of a cover-up inside its financial planning arm."
She quoted Nicholas Bishop, a victim of maltreatment by the CBA's insurance arm, CommInsure, who observed: "You're not seen as a person ever. You're just a financial liability in terms of the insurance company's eyes."
Labor is continuing its push for a royal commission into the banks, with Labor opposition leader Bill Shorten again writing to Prime Minister Malcolm Turnbull to urge him to support a royal commission.
Turnbull has so far rejected this call, and contented himself with a pledge to make the heads of the banks appear before a parliamentary hearing once a year — the political equivalent of being struck soundly with a feather duster.
Treasurer Scott Morrison has vainly tried to defend the banks, accusing Shorten of engaging in a "populist whinge".
This only underlines the federal Coalition government's position as frontline agents for Australia's big business corporations, in the face of widespread community anger against the unbridled greed of the 1%.
Media reports suggest Labor is likely to have sufficient support from crossbenchers in the Senate to pass a motion for a banking royal commission and can count on the backing of independents in the House of Representatives.
The test would then be to see if Coalition dissidents in the lower house who have supported calls for a royal commission, can be convinced to cross the floor.
Some Coalition MPs, such as Liberal MP Warren Entsch, have already begun backtracking by proposing an independent compensation tribunal for bank customers instead of a royal commission.
Queensland independent MP Bob Katter accused Entsch of "dogging it", and urged him to continue supporting the royal commission option, the Guardian reported on August 16.
Meanwhile, the arguments for a publicly-owned "people's bank" is becoming increasingly stronger.
Professor John Quiggin from the economics department at the University of Queensland, told the August 9 New Daily that a counterweight to bank misconduct, "padded" margins and a lack of competition might be the creation of a "people's bank" — precisely what the old Commonwealth Bank used to be before the Hawke-Keating Labor government privatised it in the early 1990s.
"There is still a very strong argument for a publicly-owned bank with a charter offering a narrower range of services specifically to households and small business," Professor Quiggin said.
He argued that savings deposits and basic loans are public utilities from which private banks should not derive huge profits. A government-owned bank could provide these crucial financial services at lower costs, while also helping to fix the problem of low confidence in the banks, which he said "isn't going away".
Professor Quiggin pointed to the government-owned Kiwibank in New Zealand as proof the idea can work. Kiwibank was established as a subsidiary of the NZ postal service in 2002 and offers banking services through post offices and bookshops.
Its advocates argue it has delivered lower fees and better services. Crucially, Kiwibank has passed on every interest rate cut announced by the Reserve Bank of NZ in full.
The idea of a new public bank was also promoted in a paper written by Melbourne University professors Paul Kofman and Carsten Murawski in the Australian Economic Review in 2015.
Kofman and Murawski write: "In Australia, where the banking system is dominated by four major banks, core financial services are often not provided at cost and exclude significant parts of society.
"High net interest margins on residential mortgages, high fees on superannuation accounts, a lack of credit for small- and medium-sized enterprises or rural Australian, the unavailability of key rise management products, such as fixed-rate residential mortgages or annuities, are examples that spring to mind," the economists argue.
"We suggest ... the establishment of a public-sector institution that provides core financial services, such as payment services, savings accounts, mortgages and other basic forms of credit, to retail customers and small- and medium enterprises. We think of it as a utility that ensures cost-effective provision of basic banking services to all Australians".
"The institution would be independent, but backed by the Commonwealth government, and funded by government equity, deposits and public debt. It would be governed by an independent board, be transparent and accountable to the public," they stated.
Such a "people's bank" could be an important step toward a key proposal advanced by Socialist Alliance: "Put the Big Banks in public hands. Nationalise the Big Four under workers' and community control."
The Socialist Alliance says it is necessary to "place the massive assets they possess under public ownership, to be used for the good of the community" through building public works and funding public health, education and transport.