Tony Abbott refuses to order Royal Commission into Commonwealth Bank

Issue 

The Tony Abbott government has refused to establish a Royal Commission into the Commonwealth Bank, despite the clear recommendation of a landmark Senate inquiry into financial planning scandals at the CBA.

"The inquiry, which spanned 12 months and attracted a record number of submissions, scrutinised the performance of the corporate regulator [the Australian Securities and Investments Commission (ASIC)] in the wake of revelations by a whistleblower of misconduct and fraud in CBA's financial planning arm," the October 24 Sydney Morning Herald reported.

Thousands of people lost their life savings as a result of the allegedly bad advice given to them by planners at the country's biggest bank.

CBA whistleblower Jeff Morris criticised the government's decision, saying it had called other royal commissions "at the drop of a hat into unions and pink batts for blatantly political purposes, yet had not accepted the thoroughly reasoned recommendations of a bi-partisan Senate committee."

He said the case for a royal commission was compelling and grew stronger every day.

"Since the Senate report, problems at Macquarie Private Wealth have emerged, the ludicrously low standards of training have been exposed, one-third of insurance advice has been found to be defective, thousands of Timbercorp victims face losing their homes, and CBA has been dragging the chain on a questionable compensation scheme for victims," he said.

Commenting on the decision, SMH business reporter Adele Ferguson wrote on October 25: "A royal commission would have examined the role of management in the CBA's financial planning scandal. All got off scot-free. Some are still with CBA, while others were parachuted into other organisations, taking with them an aggressive sales culture and addiction to bonuses that was driven by advisers selling more products to consumers, often not in their best interests. They need to be held to account."

Meanwhile, the SMH noted on November 6, that the "Commonwealth Bank is powering towards a record profit of $9.5 billion. ... If the growth trends persist, CBA is also on track to become Australia's first non-miner to report a profit of more than $10 billion over the next two years.'

Susan Price, Socialist Alliance candidate for the seat of Summer Hill in the upcoming NSW state elections, said, "This scandal underlines the importance of the Socialist Alliance's call for the big banks to be nationalised under workers' and community control.

"Australia's Big Four banks are making massive profits from ripping off the people, while facing minimal public scrutiny. The CBA was a publicly-owned bank, until the Hawke-Keating Labor government privatised it in the early 1990s.

"We need to campaign for the CBA and other big banks to be placed in public hands, and to be run in the interests of the people. Any profits could be used to help fund education, health and public transport — not pouring into the pockets of the super-rich as they are now," Price said.

Like the article? Subscribe to Green Left now! You can also like us on Facebook and follow us on Twitter.