Kevin Hogan questions four major banks in Parliamentary inquiry
WESTPAC is "hugely supportive of the agricultural sector” in Australia but its "systems cannot handle” allowing farmers to offset loans with deposits, according to chief executive Brian Hartzer.
The comments were made to Page MP Kevin Hogan, who questioned executives from Australia's four major banks as part of a national parliamentary committee hearing this week.
"If you are a farmer and you have inconsistent income and you have a good year, there is an account called a farm bond account and it often receives, especially right now, quite low interest rates but farmers don't necessarily want to pay down debt with it because the next year they might have no income,” Mr Hogan said during a hearing break yesterday.
"At the moment banks don't offset the deposit to the loan ... I think there's certainly retail accounts that do that and other business accounts do offer that, if there's money in one account it offsets the debit in another account.
"I'm certainly going to be pushing that.”
Tribunal for 'ripped off' customers
Mr Hogan said he didn't think the increase of the four banks' market share was "healthy” and asked Mr Hartzer about the function of RAMS Home Loans in relation to Westpac mortgages.
Mr Hartzer said RAMS was "a separate brand” and "not a mortgage brokerage service” but acknowledged that RAMS customers were offered loans from Westpac rather than the other three major banks.
"I think these hearings are providing more accountability,” Mr Hogan said.
The National Part member, who worked for banks as a money market and bond trader during the 1990s, said he wanted the inaugural inquiry to lead to a new tribunal for aggrieved banking customers.
"The main aim of it would be ... for customers who feel they've been ripped off, whether it be an insurance claim that hasn't been paid, dodgy advice from a financial planner, or whatever other instance,” he said
"I think they need an entity that doesn't mean they have to pay a lawyer a lot of money to seek redress or compensation from the banks.
"That should be the primary role of this tribunal.”
When asked if such a tribunal would be funded by the banks themselves, Mr Hogan said "there's no reason why it shouldn't be”.
"I don't think it's a bad idea,” he said. "It doesn't necessarily compromise it, it doesn't mean they're in charge of it, it doesn't mean it isn't independent but that will be something we discuss.”
Earlier in the week, National Australia Bank chief Andrew Thorburn said the bank had stopped making political donations due to negative customer perception but Mr Hogan said he had "no opinion on that”.
"Just because a party or an organisation may donate to a political party doesn't necessarily (mean it) wants any special favours,” he said.
Commenting on the issue of housing affordability in terms of higher value for banks offering mortgages, as had been raised by Greens MP Adam Bandt during hearings, Mr Hogan said: "I don't think (banks) can be that clever with it” and stressed the need for councils and state governments to work cooperatively with the Federal Government on construction opportunities.
"The Northern Plateau in Lismore and other areas in our region ... it's very important that some of those developments go ahead because the biggest thing we can do to try to help housing affordability is to have more stock of houses,” he said.
One of Mr Hogan's main questions to banking executives this week was on their reluctance to reflect Reserve Bank cash rates in interest rates for loans.
All four major bank chiefs told the committee that interest rates were more reliant on the cost of funding and market pressure than on Reserve Bank decisions but Mr Hogan was dissatisfied.
"I think some answers can be selective,” he said.
Where other MPs have used the hearings to highlight a lack of consequences for senior banking executives after unscrupulous and unlawful dealings by financial planners and/or insurance dealers under their management, Mr Hogan said recent increased powers given to the Australian Securities and Investments Commission meant the coalition's plan to host annual banking reviews and to create a tribunal provided enough accountability.
Treasurer Scott Morrison asked the Standing Committee on Economics, consisting of 10 other politicians and headed by Liberal MP David Coleman, to "inquire into and report on a review of Australia's four major banks” in line with coalition election promises earlier this year.
Leader of the Opposition Bill Shorten has described the inquiry as "a friendly catch-up, not an investigation” and has called for a royal commission into what Shadow Minister for Small Business and Financial Services Katy Gallagher has said are systemic failures in the banking industry.