Bill's Transcripts

Interview on 891 ABC Adelaide - Mornings with Ian Henschke


IAN HENSCHKE:    Well anyone that takes on the banks is probably going to be in for a bit of a fight. Bill Shorten is the Financial Services Minister. He's called on the banks to reveal how much they lend to people in different areas of capital cities, in a way reveal the why they lend, how they lend. Are the banks going to agree to this Bill Shorten?

 BILL SHORTEN:      I don't know. What I think though it's pretty unarguable. Banks already publish corporate responsibility reports. I just think that they should look at publishing regional lending and deposit data using - I don't know - hardship postcode data or put in plain English. I want to make sure that everyone in Australia, all the small businesses in Australia, all the individuals seeking - families seeking mortgages, get the same treatment and the same access to credit as every other Australian and that the postcode doesn't discriminate.

 IAN HENSCHKE:    Do you know that this is a problem or is this something that you are addressing before it becomes a problem?

 BILL SHORTEN:      I think anecdotally you hear reports from hardline brokers that it's just much easier to get a mortgage in some suburbs than other suburbs. I know talking to small businesses that whilst they see a support for big mining projects and that's entirely appropriate in regions of Australia sometimes businesses for want of some extra capital could be able to expand their business in an existing suburb with existing workforce. So it's not anti-bank but it is - I have a view that the more transparent communities can see what banks do, the more transparent that they can see the actions of banks the more confidence people can have in banks.

 Say you've got the suburb of Elizabeth, say you've got eight or nine different banks have branches or outlets but say some of them tend to lend more money for mortgages and more to small businesses in Elizabeth than others. Then having that information available to me shows two things, one, if you've got banks and branches who are acting in their local community that'll inspire confidence in them and if you've got other banks and branches who are conspicuously absent from the field well I think that raises questions.

 IAN HENSCHKE:    One of the questions it does raise though is that in America where the financial service industry there decided to lend to people in areas where people were struggling that was one of the causes of the Global Financial Crisis. They effectively…

 BILL SHORTEN:      Ohh, no it wasn't…

 IAN HENSCHKE:    Well I remember watching Four Corners with I think it was Paul Barry, he walked through these streets in America and he said these people couldn’t afford these loans, the banks knew they couldn't afford the loans, this is why there are now hundreds and thousands of empty houses, this is where it all began and he was talking -

 BILL SHORTEN:      That's true and I'm not going to dispute what you said about that but what I'm talking about is transparency not irresponsible lending. I'm not saying to someone you've got to lend money to someone who can't repay you. That risk evaluation is for banks. But what I am concerned about is how transparent access to credit is in Australia. Transparency does not equate to irresponsibility, it's exactly the opposite. What I'm also suspicious of is I don't want irresponsible lending but I don't want lazy lending. I don't want people, not small businesses and individuals not being able to access credit because of where they live.

 IAN HENSCHKE:    But are you saying that at the moment banks say that's a suburb where there is a higher rate of unemployment therefore that business that's going for a loan in that area, I’m not going to lend them in the same way as I would in an area which has higher employment? Wouldn't that just make sense?

 BILL SHORTEN:      Well why don't we see the data? Why don't we just see? Banks now report corporate social responsibility. My hunch is that there's good news in every suburb in Australia and there are people trying to do the best wherever they live but I've got a hunch that sometimes institutions will look at particular areas and say too hard. Now if that's not the case then the data will reveal that.


 BILL SHORTEN:      But what I do know is that for business in Australia they need capital to expand and I just don't want lazy lending practices and I don't think there's anything wrong. This is transparency not proposing some new law, not saying you've got to give money to person A or person B but I do think that transparency helps fuel access to credit, it means that some banks who are willing to show leadership, willing to invest, will get the greater loyalty of customers.

 IAN HENSCHKE:    Well I hasten, you know, that some people might say once upon a time we had a thing called the Commonwealth Bank that was in the interest of the Commonwealth of Australia that could make those…

 BILL SHORTEN:      Yeah.

 IAN HENSCHKE:    …particular policies if it chose to do so and lend to people on that basis. You're saying that now that we effectively as a government, a federal government, have got out of the banking system and you've handed it over to them but you need to try and reign them back in and control them a bit more do you?

 BILL SHORTEN:      I’m saying nothing more and nothing less than transparency empowers people.


 BILL SHORTEN:      If you're not greatly rich and if you're not greatly powerful transparency is your ally because you can see what the deal is you're getting.

 IAN HENSCHKE:    Okay, well look we're getting plenty of calls on this so maybe there is a problem out there. If you've had a problem with the banks not lending to you and you think Bill Shorten's on the money on this one, Bill Shorten, Financial Services Minister is on the line. John of Adelaide, good morning John.

 CALLER JOHN:       Yeah, good morning. Look to me this is just another red herring brought up as a bit of a vote catcher. We're in a capitalist society. Ask the reason why they do it not whether they do it or not but why. There's fiscal responsibility required by every corporation to look after their shareholders. I don't think they're discriminating on teller rates or anything else, it is purely fiscal and, you know, the Government should finally wake up and work out that they should be a bit of a corporation as well and not lend out more money than what they've got coming in we'd be a bit better off. I mean unemployment figures are going through the roof and rising costs within the community, rent, power, everything else. They've lost the plot.

 IAN HENSCHKE:    Alright, alright John, we're getting more calls to this then we'll go back to Bill Shorten. Rob of Sturt, good morning Rob.

 CALLER ROB:         Hi. Just sort of the other side of the coin here, I've got a property for sale at Milang and I've been told that people if they want to buy that property they'll be - have less money available to them then if they were buying a house at Strathalbyn ten minutes up the road.

 IAN HENSCHKE:    So you think Bill Shorten's right on this, you'd like to see the transparency in how banks are lending?

 CALLER ROB:         Yeah, I do. I think him and the other caller probably made a good point. If you're running a business you'd look at the ability of the person to repay the loan but if you're selling a house why do they not take into account the ability of the person to repay the money rather than say oh well by that postcode - and that's what I was told by the agent…


 CALLER ROB:         …- that postcode will get ten per cent less than the next postcode.

 IAN HENSCHKE:    Okay, thanks for that Rob. Matt the truckie and then we'll quickly go back to Bill Shorten. Good morning Matt.

 CALLER MATT:        Good morning Ian and I know you're on a time schedule so very quickly I'm just amazed at the audacity of a guy like Bill Shorten to mention transparency given what's gone on with the HSU and to look at the Federal Government, State Government and Local Government budgets and if anybody, including Bill Shorten, can work out how much money they spend in each suburb and what they spend it on, if he can do the same thing for us as taxpayers I think we'd all be a lot happier. Especially the amount of money they spend in marginal seats to try and win votes. So before he starts on the banks I think he needs to look at his own backyard. Thanks very much Ian. Cheers.

 IAN HENSCHKE:    Alright, thanks. Bill Shorten, your response to those calls?

 BILL SHORTEN:      Okay, let's do the three callers. The last chap, yeah the Government can tell you in programs and suburbs so we can do that. So, well that gentleman now I can satisfy on that matter now support transparency for banks because it's one thing - if he wants to say he wants transparency and I say yes we can deliver that I hope then he applies the same standard to banks. To the first gentleman who said that corporations have got to act for shareholders and that's it, well yeah I agree but corporations don't have - operate in islands independent of the society in which they operate, they've got obligations to stakeholders and communities. There can be no serious argument against transparency. I am not suggesting corporations make uncommercial decisions but I am suggesting that the banks can report who's getting what share of their credit.

 IAN HENSCHKE:    Well the second…

 BILL SHORTEN:      What's wrong with that?

 IAN HENSCHKE:    The second…

 BILL SHORTEN:      And the second person…


 BILL SHORTEN:      …well I think he just confirmed what I was saying.

 IAN HENSCHKE:    Yeah, so that did confirm that there is a problem. Someone's saying look it's your postcode that's the problem when you're selling a property. That is a fascinating insight maybe you need to go and have a look at - I think it was Milang he said and Strathalbyn. Check out those postcodes.

 BILL SHORTEN:      Yeah well I mean I'll just say a couple of the callers obviously don't like the Government and that's their democratic right but let's not confuse their political views with what is an idea about transparency…

 IAN HENSCHKE:    Well just very quickly though on that HSU union issue.

 BILL SHORTEN:      Yeah.

 IAN HENSCHKE:    We heard yesterday that many people would consider what has gone on there as criminal activity. Will you take action in the criminal area?

 BILL SHORTEN:      Well let's get the facts on the table there. First of all I don't think most unions act like the HSU but what has happened in part of that union - and not the South Australian part of that union but in the HSU East Branch - is completely unacceptable. It's greedy, stupid conduct.

 IAN HENSCHKE:    But is it criminal…

 BILL SHORTEN:      Well that'll be for the courts to determine on the evidence. There are civil penalties and there are potential criminal penalties. What we have in Australia is we have an independent agency to make those decisions, not politicians of either party. What the Government's done though and to enhance transparency is the old rules governing unions and employer associations were put in place by Tony Abbott when he was the minister, we strengthened them. It sometimes takes a Labor Government to make these hard decisions. But some of the antics we've seen reported would have come to light much sooner under our new laws which we've put in place and it was the Government who applied to put an administrator into that branch.

 So it's a terrible point in union history this HSU East Branch, just as you have some companies who do terrible things which undermine your general confidence in business. But what I would say is the Government's put an administrator in, we've put stronger rules in which would have caught this behaviour and also I would strongly stress again about transparency that that is the element. There was insufficient transparency in the HSU East so we've remedied that but if you think transparency's good for government and other organisations I think it's reasonable for banks. That's all, nothing more, nothing less.

 IAN HENSCHKE:    And you'll make this - you'll make the banks do it. Someone's saying will it happen?

 BILL SHORTEN:      Well we'll start the discussion with the banks.

 IAN HENSCHKE:    Alright.

 BILL SHORTEN:      But at the end of the day people have got to ask for things and part of the role of being a representative is to put propositions and ideas out there which either catch on or don't.

 IAN HENSCHKE:    Alright.

 BILL SHORTEN:      But I would say to those critics of greater transparency of where the banks are lending money, what's wrong with it?

 IAN HENSCHKE:    Thanks for your time this morning Bill Shorten.

 BILL SHORTEN:      Great. Bye.


 Mr Shorten’s Media Contacts: Sam Casey 0421 697 660