I have a dream: resurrection of Westpac as a Sustainability Bank – David Shearman

I have a dream that the outrageous performance of Westpac could lead to fundamental reform and the genetic engineering of one of the identical quads of the BIG4 banks, which do not fulfil community needs or financial stability [1].

Australia needs a community orientated bank that will serve primarily the envir- onmental and social sustainability of Australia, the farmers and their quest to sustain their land in the increasing extremes of climate, small business in rural and regional communities and indeed many individuals and community organisations [2]

Government has had pride in the Big4 and frequently extolled their survival in the financial crisis of 2007-8. Their wizardry didn’t seem to matter even if they had been squirreling away cash by charging the dead. Now that the chican- ery is exposed, the government is little more than apologetic.

Government and the Big4 are brothers in neo-liberalism, free markets and creative accounting designed to ignore the externalities to human health and the environment.

For many years the government, irrespective of party label, was dismissive of the need to reform the Big4 even when Senator John “Wacka” Williams repeatedly raised the appalling financial treatment of farmers [3]. In his quest for a Royal Commission he threatened to cross the floor and by 2017 he had garnered sufficient parliamentary support to demand a Royal Commission which the banks, not government, then agreed to.

The Royal Commission unearthed a rotting malfeasance of misdemeanour which clearly shocked the experienced commissioner who tried hard to main- tain his usually bland facial expression.

However the brotherhood has not been torn asunder. And despite Westpac’s millions of offences, leading to wide-spread anger in the community and media, the body language of Ministers has been calmly reverend and carefully

condemnatory, spoken with a hushed voice pertinent to their close relation- ship. If the offences were by the family’s beneficent uncle caught with his pants down in front of small boys, might they be suggesting that his belt broke?

Now AUSTRAC’s court filing shows the offending to be almost beyond comprehension. Twenty-nine million international transactions were not disclosed to the regulator with $11 billion that has moved into Australia unreported [4] and then possibly used for evil purposes overseas.

The Westpac findings bring shame to the Bank, and even more to the government for not acting sooner.

Reform is vital and yet even now action is doubtful apart from increased regulation and a few financial penalties which would not harm the stability of the bank.

There is a pile of soiled washing on floor. Should we wash or burn the lot? The government might wash the linen but the stains will remain.

The track record of this government suggests it is unable and unwilling to grasp fundamental reform.

And the track record of the Senate Standing Committees on Economics is one of fiddling away at the edges to refine an outmoded system.

Government, economists and banks have failed to realise we now live in a different world. The priority now should be the environmental sustainability of this nation under the inevitable dire assault of the climate, biodiversity and drought emergencies.

These needs have been recognised in small ways over a number of years with the creation in several countries of green banks [3] which have had an important but limited role in climate mitigation by funding renewable energy development.

Recently the creation of public banking in California has recognised the social need for reform of banking [4] and it will have great advantages for the rural and regional areas of that State.

Oh, if only former PM Paul Keating in his enthusiasm had kept his hands off the Commonwealth Bank we might now have some diversity with a bank for the people. John Quiggin’s article of 2001 had great insight into this unhappy event [5]. Does Paul Keating have any regrets when he sees the destruction of the environment around him? The Westpac bank debacle elicits a dream of reform; the stars are aligned but the government worries about black holes.

It seems that the financial outlook for Westpac is worse than first imagined. A recent request to shareholders for $500m was dumped. Capitalisation will be marred by a poor financial outlook. The government intends to impose fines commensurate with ensuring that the bank will survive. But what if such fines actually matched the magnitude of the crimes? In that case government would be obliged to buy into the bank in a big way. Perhaps with the issue of community bonds through a public float, allowing it to be transformed into a community bank.

The Board would be of equal gender, the majority of experts being from agricultural science, small business, social services, climate and water science, sustainability science, representation from reforming economists and perhaps honorary board membership for Wacka the sheep shearer from Jamestown in South Australia.

Damn it, there’s my alarm, it’s time to get up! And so I dedicate my wonderful dream to “Wacka”

1. https://era.org.au/reforming-australias-banking-system-2/
2. https://cpd.org.au/wp-content/uploads/2010/08/CPD-OP10-Australias_Green_Economic_Potential.pdf
3. https://www.farmonline.com.au/story/5899956/wacka-bows-out-with-a-parting-gift-to-farmers-battling-banks/
4. https://www.michaelwest.com.au/the-barangaroo-triangle-inside-westpacs-invisible-banking-regime/?mc_cid=4d726361cc&mc_eid=a349a0a63a
5. https://www.vice.com/en_us/article/xygk5w/green-banks
6. https://era.org.au/california-just-legalized-public-banking/
7. http://www.uq.edu.au/economics/johnquiggin/JournalArticles01/CBAPrivatisation01.html

This article was published in John Menadue – Pearls & Irritations (creative commons)

David Shearman AM PhD FRACP is a Patron of Economic Reform Australia and is Emeritus Professor of Medicine at Adelaide University.