By Ben Wilson
Legal firm Slater and Gordon has launched Australia’s biggest ever class action. Up to 5 million, or one in three Australians, could be involved in seeking compensation, for alleged superannuation rip-offs. It is estimated that each could get as much as $3,000 in a series of landmark cases.
This could mark the beginning of ongoing actions that will add pressure for pushing through change in the way the banks operate. Although the action by Slater and Gordon focuses on superannuation, there is no shortage of allegations about the way the same banks have behaved in other areas of their operations.
Decisive share ownership in these banks is in the hands of the American Citibank and Chase Manhattan, and British HSBC. Through their stake holdings in the banks, they are major owners of many of the other corporations that operate in Australia, especially the mining industry, and are therefore pivotal to the way the Australian economy and society operate.
The AMP, which has also been exposed in the Royal Commission is part of the mix. The banks have a big stake in it and it has a big stake in the banks and other associated corporations.
Together, they form monolith of interconnections. This means that when the banks are not operating properly, are engaged in corrupt practices and mistreat people, these are problems that spread through the whole corporate world.
This is a cartel with tremendous economic power, and this gives it political power, creating a foundation for corrupt behaviour.
Findings in the royal commission have made it clear that the banks are not acting in the interests of Australian society. If the economy is supposed to serve Australian society, and this means the great majority of those who live here, a banking system that does not do this is not doing the job.
On the other hand, if the economy is here to serve only the wealthiest two percent, the banks Have done nothing wrong.
Australia must decide which one is going to be.
The Slater and Gordon class action can help to make this clearer.
Banks are necessary institutions. Their role is to pool funds at a central point and make them available. The economy couldn’t operate without them. But when they form a cartel, where those in control of the shares can use monopoly power to advantage themselves at the expense of others, the banking system becomes parasitic. It suggests that the cartel musty be broken up and monopoly power curtailed.
Australia needs a banking system that operates for the whole of Australia and dovetails into key goals like developing a solid and sustainable future economy, returning making things and distributing the fruits of work in a fair way.
A first step would be to restrict the activities of the existing banks to their core function, block their power over other corporations and stop their role in the tax evasion and money laundering game.
It is about time serious consideration was given to establishing a publicly owned bank again, to operate as a force to set the standards. Assistance should be given to encourage the growth of community managed or cooperative banks. They would provide a more people friendly alternative.
A new form of banking could emerge from this.
People who Have been hurt should be compensated, and those found by proper legal process to be guilty of the grossest wrongdoings deserve to be punished appropriately.
Is there one good reason to stop at this and not take it further?