27
Jun 2018

Will the Royal Commission address a Reconstruction Bank and receivers?

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27 June 2018: KAP Leader and Federal Member for Kennedy Bob Katter is not giving up on his steadfast campaign to get decent banking services and a fairer financial system for all Australians, especially rural communities. Mr Katter came out swinging in Parliament today and used Question Time to ask the Treasurer about the scope of the Royal Commission.

Mr Katter’s question follows his attendance at the farm finance hearings in Brisbane yesterday to support Aussie farmers whose lives have been profoundly impacted by unethical banking practices. Mr Katter left the hearing feeling deeply frustrated that the Royal Commission isn’t going far enough and might end up being a ‘toothless pussycat’ because the watered down terms of reference set by the Government mean a solid outcome is highly unlikely.

Yesterday, Mr Katter politely asked Commissioner Kenneth Hayne:

Are we going to address why these things happened and what we can do about it to improve it in the future? Is the commission going to address those issues?

And today, Mr Katter followed up the fight by asking the Treasurer:

In Australia where only two entities buy and sell food.

In a world where 41% of farm income is from Government the removal of collective bargaining and all tariff/subsidy yarded Australian farmers for butchering by the banks. Can you assure the house that the Royal Commission will include the ‘carrion’ - the receivers and ‘address’ the issue of a Reconstruction Bank, enabling farmers to ride the roller coaster of supply and demand?

It won’t remove the truncating by taxes of the ‘ups’ but it will at least stop the banks from “elongating the downs” with a continuous imposition of discretionary punitive charges.

Yesterday, Mr Katter stood beside a group of aggrieved and enraged farmers at a press conference outside the Commission and he will continue to advocate for these hardworking people.

“Most of the mob around me has been fighting for this for five or six years. And the fact that the banks were able to set up the Royal Commission, and not we the people, it is frustrating for us. We are seeing all the pain and horror filtered through the forensic process.

“The hide of this business, we are averaging one suicide every two weeks – and no one cared about us, no one did anything about it – and it continues today with one farmer doing away with himself every five or six days in Australia.

“Of course the banks will just go back to where they were before. They are under commercial pressures to compete against each other.

“These are people (the farmers) that have been on the land for generations and generations – they are not out for a big quid – they have fought a thousand elements and survived – but they can’t survive with the cards that have been dealt to them. We hope this Commission gives us the leverage we need to get a restoration of the Reconstruction Banks – to keep the other banks honest.

“We are now playing rugby league without a referee and the people of Australia are disgusted.”

Shortly after the press conference, Mr Hayne announced that the scheduled hearings on natural disaster insurance would be delayed to allow more time to examine farming finance.

For more information or a comment from Bob Katter please contact the media phone: 0418 840 243

Further background information

The Treasurer responded by stating:

I thank the member for his question and his passionate interest in these topics. Can I assure him that the terms of reference would catch liquidators, to the extent that they were operating on behalf of a financial services entity—for example, a receiver—as defined in the letters patent. The constitution has an insolvency head of power which would likely enable the commission to use its coercive powers to obtain evidence from liquidators. In looking at the conduct of liquidators, the commission may also seek to investigate other appointments, such as forensic investigators, accountants or valuers, which are often part of the receivership process, as the member would be aware. Referring to registered liquidators or receivers would single them out from the wide category of services—for example, accounts and orders that are similarly captured—and it may be inferred by some that other similar services are not included.

Rural debt was around $71.6 billion as at 30 June of 2017, and 96 per cent of that debt is held by the banks. Our agricultural sector exports are some $51.6 billion. Seventy per cent of Australian farm business is in grain, beef and sheep. It's also important to note, as the member would also be keenly aware, that these farm businesses typically have a turnover of less than $10 million.

What the royal commission has been tasked to do is look at all of these matters I've referred to. I'm not going to prejudge—I'm sure the member wouldn't expect me to—the findings and recommendations of the royal commission. He's unconstrained in that matter and in relation to the specific issues he's raised and the proposals that he's put forward here. I understand he's ventilated at the commission itself. He will have the opportunity to respond to that and make such recommendations to the government as are appropriate.

The Treasurer’s response indicates that the Royal Commission terms of reference will look at receivers but this seems to be at odds with what the counsel assisting Rowena Orr told the Commission on Monday 25th June:

The conduct of receivers does not fall within the terms of reference of this Royal Commission, because receivers do not fall within any of the categories within the definition of a financial services entity. Most relevantly, for present purposes, a receiver cannot be considered to be a person or entity that acts or holds itself out as acting as an intermediary between borrowers and lenders. This is because, while receivers are appointed by a bank, they are generally stipulated to be an agent of the borrower and they are separate to a separate and distinct regulatory regime under chapter 5 of the Corporations Act. As such, the conduct of receivers is not within our terms of reference and will not be examined in these hearings.

Contact Details

Innisfail
P: (07) 4061 6066
F: (07) 4061 6566
Visit: Cnr Edith and Owen St
Post: PO Box 1638
Innisfail, Qld 4860

Mount Isa
P: (07) 4743 3534
F: (07) 4743 0189
Visit: 42-44 Simpson St
Post: PO Box 2130
Mount Isa, Qld 4825

Canberra
(when Parliament is sitting)
P: (02) 6277 4978
F: (02) 6277 8558

Local Call within the electorate
P: 1300 301 942

Email: Bob.Katter.MP@aph.gov.au