- Introduction
Background
1.1The House Standing Committee on Economics (the Committee) has had a mandate to inquire into Australia’s four major banks since 2016, when the Treasurer formally requested that the Committee undertake at least an annual inquiry into the performance and conduct of Australia’s major banks.
1.2This mandate has been repeatedly renewed since revelations about widespread misconduct in the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, 2017 to 2019 (the Hayne Royal Commission).
1.3The Committee conducted reviews of the four major banks throughout the 45th and 46th Parliaments. In January 2023, the Treasurer again renewed this mandate, requesting that the Committee ‘undertake an annual inquiry into Australia’s four major banks’. This report concludes the Committee’s major banks inquiries for the 47th Parliament, summarising key discussion at public hearings in 2023 and 2024.
Conduct of the inquiry
1.4The Committee held public hearings with each of the four major banks on 12 and 13 July 2023, and 29 and 30 August 2024.
1.5The hearings were open to the public and broadcast on the Parliament’s website, allowing interested parties the opportunity to view proceedings. Transcripts of the public hearings are available on the Committee’s website.
1.6A list of representatives who appeared before the Committee can be found at Appendix A. The banks’ responses to questions taken on notice at the hearings, and questions in writing following the hearings, are available on the Committee’s website and listed in Appendix B.
Structure of the report
1.7This report highlights key matters raised at the public hearings. Chapter 2 discusses the experience of banks’ retail and business customers over two difficult years for the Australian economy, marked by the lingering effects of the global energy price shock in early 2022, and persistent pressures from inflation and higher interest rates. This chapter includes the banks’ reflections and forecasts on economic growth, interest rates, global economic conditions and the labour market. Bank data suggests that households and businesses have remained surprisingly resilient in aggregate thanks to sustained low unemployment—but many are not thriving, and the economic pain has been shared unevenly. Bank data points to particularly stark divergences in spending between older and younger Australians, and in the experiences of businesses in different industry sectors.
1.8Chapter 3 focuses on recent activities relating to the culture and conduct of the banks. Five years on from the Hayne Royal Commission, the Committee found reasons for concern. This chapter discusses recent changes to staff bonuses initiated by the Commonwealth Bank of Australia (CBA)—criticised by the Australian Securities and Investments Commission (ASIC)—as well as widely reported allegations centred on ANZ’s Markets business, including a current ASIC investigation into suspected manipulation of the bond market.
1.9Chapter 4 examines the evolving banking services and payments system landscape. Key issues include the trend of branch closures, which has raised concerns about equity for rural and regional customers as well as those who need or prefer to transact in person. The Committee also heard evidence from the banks on the critical role of the Bank@Post program in maintaining access to banking services as branch footprints are decreased. This chapter also discusses the growing concern over fees and charges associated with card payments in the current high cost-of-living environment.
1.10Chapter 5 discusses the increasing exposure of Australians to sophisticated scams—particularly through digital platforms and social media—which continue to cause significant financial losses and emotional distress. The Committee heard from the banks on their substantial investments into technology to detect and prevent scams. The Committee raised concerns about the banks’ inconsistent approaches to reimbursing impacted customers, and heard evidence from the banks on international models for reimbursing scam victims, including in the United Kingdom. The banks also emphasised the need for mandatory codes of conduct for all major stakeholders in the ecosystem—especially digital platforms—and the importance of a collaborative cross-industry approach to combatting scams.
1.11Chapter 6 incorporates discussions with the banks on a wide range of other issues of interest to the Committee. This includes housing affordability and opportunities to lift the supply of housing, the impact of prudential standards on credit availability (with a focus on serviceability tests), and the banks’ environmental, social and governance policies, particularly climate policies in support of Australia’s transition to a Net Zero economy.