Banking on anger
Farmers’ antipathy to banks goes back a long way
After six years of forensic investigation into Australia’s banking industry, covering two award-winning Four Corners programs and culminating in a year-long royal commission, one might think there is little more for Adele Ferguson to expose. Nonetheless, the celebrated journalist’s new book, Banking Bad, has brought new revelations that have already triggered an inquiry into potential conflicts of interest within the big four audit firms. And last night’s packed launch in Sydney delivered fresh insight into what drove a key Ferguson contact, former Nationals senator John “Wacka” Williams, to work so doggedly to make sure the banks were held to account. Back in the 1980s, Ferguson said, Williams himself fell victim to an unscrupulous Commonwealth Bank sales tactic that cost him his farm and his marriage, and which nearly broke him altogether – for a while he was living in a $2000 caravan – before he got himself back together and went into politics.
Williams’s story is told in the book: it was 1985, Williams was a 30-year-old sheep farmer from northern New South Wales still suffering financially from the drought three years earlier, and the Hawke government had floated the dollar and embraced financial deregulation. Sleepy domestic banks were turning into profit-making machines; tellers were turning into target-driven salespeople. Williams went into CBA’s Inverell branch to borrow $200,000 and, after being sent down to the Sydney head office to hear the benefits of foreign currency loans, which had lower interest rates, emerged with a debt of $640,000 denominated in … Swiss francs.
Within weeks, the currency markets had turned, and Williams was $1.5 million in debt. Williams found out that he couldn’t hedge his exposure. He was in daily contact with CBA’s currency trading room. Eight out of every 10 currency trades made things worse. He lost the farm, his marriage broke down, and at the low point – alone in the caravan – he could barely afford to turn the heater on in winter. He would fight the bank for more than a decade, finally winning compensation in the Court of Appeal in 1999. “[CBA] behaved like a pack of arseholes,” Williams told Ferguson.
Williams’s story is far from isolated – many farmers were burned by foreign currency loans, sold principally by CBA and Westpac – and it goes some way to explaining the antipathy towards the banks in the National Party, as emerged from last night’s conversation between Ferguson and James Chessell, Nine’s group executive editor of Australian metro publishing. Ferguson credits Williams, who was a member of a landmark 2014 Senate inquiry into the performance of the corporate regulator, with being first to call for a royal commission into the banks; the threat that Nationals might have crossed the floor was a key reason for then prime minister Malcolm Turnbull’s decision in 2017 to order the royal commission.
The Q&A at the launch was informative, and ranged from the lessons of deregulation in the 1980s to the failure of “too-timid” regulators, the performance of bank bosses and the lamentable treatment of whistleblowers in this country. Jeff Morris, the CBA whistleblower who got the ball rolling for Ferguson, was in the crowd and received rousing applause.
Most sobering, perhaps, was Ferguson’s take on the hits and misses of the Hayne royal commission. While praising the running of the commission itself and Hayne’s penetrating analysis of greed in the industry, Ferguson said she was let down by the recommendations, which didn’t get to the heart of the problem. “It was as if he was afraid,” she said. Ferguson said the inquiry needed to be a lot longer than a year, and needed to hear from more of the thousands of bank customers who made submissions – only 27 of whom were called. “I don’t want to be a pessimist,” she said, before adding, “It’s basically business as usual.”
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“Last week’s investigations by Nine Media produced credible allegations that politicians were involved in fast-tracking highly dubious characters past normal customs procedures and directly to Crown Casino ... But when the Greens and crossbenchers demanded a public inquiry, Attorney-General Christian Porter, with the support of a supine Labor Party, knocked them back with an ineffective alternative that would shield the politicians from scrutiny. This looks horribly like a stitch-up.”
“Australia’s law-enforcement agencies are sidestepping the courts to obtain the vast majority of their phone-tap and email interception warrants from the Administrative Appeals Tribunal – a body that has attracted criticism for the number of its political appointees, some without legal qualifications.”
“David Eastman could be very annoying. Throughout the 1970s, ’80s and early ’90s, everyone who was anyone in the nation’s capital received complaints, threats, tip-offs, late-night crank calls and early morning doorknocks from Eastman, a former dux of Canberra Grammar, son of a decorated ambassador, and one-time Treasury wunderkind.”
Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is also the author of three books, including a recently updated unauthorised biography of Malcolm Turnbull, Born To Rule?
After six years of forensic investigation into Australia’s banking industry, covering two award-winning Four Corners programs and culminating in a year-long royal commission, one might think there is little more for Adele Ferguson to expose. Nonetheless, the celebrated journalist’s new book, Banking Bad, has brought new revelations that have already triggered an inquiry into potential conflicts of interest within the big four audit firms. And last night’s packed launch in Sydney delivered fresh insight into what drove a key Ferguson contact, former Nationals senator John “Wacka” Williams, to work so doggedly to make sure the banks were held to account. Back in the 1980s, Ferguson said,...