Expert Urges Changes in Financial Regulation at Citizens Party Conference

Melbourne, November 17, 2024 — Associate Professor Dr. Andy Schmulow from the University of Wollongong delivered a passionate speech, at the Australian Citizens Party National Conference, calling for significant reforms in Australia's financial sector.

Dr. Schmulow, known for his expertise in financial regulation, criticised the current state of banking oversight and advocated for the establishment of a postal bank with strong customer protections.

The professor highlighted the need for a “Treating Customers Fairly” regime, similar to those implemented in the UK and South Africa. He argued that such a framework could help ensure that a potential people's bank would prioritise customer interests.

Dr. Schmulow also took aim at the Big Four banks, accusing them of breaking promises to maintain rural branches despite benefiting from taxpayer guarantees. He estimated these guarantees have saved the banks approximately $72 billion over 20 years.

The speech included sharp criticism of PwC for its alleged role in facilitating tax evasion by multinational corporations. Dr. Schmulow recounted his own experiences of facing pressure from PwC after publicly criticising the firm.

While the content of the speech was provocative, and may be regarded as entertaining, it's important to note that these are Dr. Schmulow's personal views and allegations. The Australian Citizens Party, which hosted the event, is known for its advocacy of banking reform and a national postal bank.

Watch the Speech Here:

Notable Quotes:

1. “Federal treasury is the power behind the scenes, and they're not interested in doing what's good for Australia, they're only interested in doing what's good for Federal Treasury.”

2. “We have the right to say to them [big banks], you will provide branches in the bush. We're not asking you for a favour, we're not asking you for a gift — you owe us now.”

3. “There is a way to enshrine treating customers fairly, to do it in a manner that ordinary consumers can understand. And guess what happens when ordinary consumers can understand their rights? They are better at enforcing their rights.”

4. “Companies like Google and Microsoft and Apple and Facebook… come to Australia, they earn billions of dollars in profits and let me tell you how they do that. They do it by running a business that leverages off resources provided to them by the taxpayer.”

5. “[Google]“We pay tax on those billions of dollars in the country in which we are registered.” “Which is which country? Google America?” “Yes. No. Bermuda.” Bermuda, where the tax rate for companies is zero. They don't really have their head office in Bermuda, they have a P.O. box in Bermuda. And these arrangements have been set up by firms like PwC.”

Speech FAQs:

Question: What is the “Treating Customers Fairly” regime that Dr. Schmulow advocates for?

Answer: It's a legislative framework first adopted in by various governments around the world. It consists of six outcomes aimed at ensuring financial institutions treat their customers fairly.

Question: Why does Dr. Schmulow criticise the current Australian financial legislation?

Answer: He argues that the current legislation is overly complex, spread across multiple acts, and difficult for ordinary consumers to understand and enforce their rights under.

Question: What is Dr. Schmulow's background in financial regulation?

Answer: Dr. Schmulow has extensive experience, including advising various governments and regulators, and contributing to the Hayne Royal Commission in Australia.