Interview: Warren Entsch

JEREMY FERNANDEZ: The Government's relations with the banking sector have hit a rough patch. The Treasurer, Scott Morrison, is suggesting he'll bypass former Queensland Labor premier, Anna Bligh, who's been appointed to head the Australian Bankers Association. One of the Treasurer's chief advisors has resigned over that dispute. There were even reports that some Coalition MPs wanted the "big four" banks excluded from the government's promised company tax cuts.

Meanwhile, the Greens are edging closer to forcing a royal commission-style inquiry into banking, with the Nationals MP George Christensen willing to cross the floor to support it. For his response, Queensland Liberal MP Warren Entsch joined us earlier.

Warren Entsch, thanks for joining us. A significant number of MPs on the other side of the House and on the crossbenches share the view that you formerly held, that nothing less than a banking Royal Commission or a commission of inquiry to the Parliament will do in bringing the banks to account. So, why not afford those MPs the chance to act on that scepticism?

WARREN ENTSCH, QUEENSLAND LIBERAL MP: My view is that, and yes, you're correct - initially I had formed a view that there was no other alternative, I had been working for many years, well over a decade on victims, with victims, trying to find some sort of way that I could get their voices heard. We'd gone through APRA, we'd gone through ASIC, we'd gone through Federal Police, we'd gone through a whole raft of things that we were directed to, to no avail.

And so, out of frustration initially, I thought that maybe a commission or Royal Commission was the only alternative. Then, I became aware of a House of...a joint standing committee on impaired loans that was chaired by David Fawcett, and I approached some of the members and asked them if it was possible for some of my constituents to present their cases, which they did, and through that process I came to realise very clearly that we were not going to be able to deal with this through a broad Royal Commission, because these voices were not going to be heard.

It's quite evident that we all know what the problems are, and it's about trying to find solutions. And so, this is where this concept of some sort of an entity like a tribunal or something, where the victims of the past can actually share their stories, we get some sort of enforceable determination on that, and we start to put a spotlight on some of those practices that have caused these problems. This way we can start to look at changing the culture of the banks.

JEREMY FERNANDEZ: Well, part of that precipitating of that change is George Christensen, also potentially throwing his number across the floor in supporting a commission of inquiry at the very least, that's a reasonable point of view?

WARREN ENTSCH: Well, I ask George and I ask all of those that are out there arguing for a inquiry or Royal Commission, asked them, what is the terms of reference? What we need is what Kate Carnell is suggesting, is that we get some sort of entity, call it what you like, that can actually invite victims, people that have been done over here, understand that they're lucky to have the shirts on their backs, get them to present their case, allow this tribunal or this entity to making enforceable determinations, and she's also recommended in compensation, which I agree absolutely, but I think it should go further than compensation, we should be looking at a system that is currently in America, where it's three times, three times the value of the damages. Now, that will sit up and make banks take notice.

JEREMY FERNANDEZ: So, can I ask you what you think then of George Christensen's view on this, given that he is one of your number, throwing his vote potentially across the floor on this issue?

WARREN ENTSCH: Well, look, I would encourage him to start to talk to the victims, rather than just grandstanding on this. I'm telling you, I mean, you can go out there grandstanding and you can talk about royal commissions, whatever you like, without putting any terms of reference there. Meanwhile, these people are not getting any younger and they are continuing to suffer.

What I'm saying is that there are other alternatives. And out of these processes, it may well be when we put a spotlight on some of these victims' cases, there may well be areas that it is determined that they cannot resolve, that it highlights other issues. Through there, you may well get some terms of reference that you can refer onto a commission and focus on the areas that can't be resolved.

But in the meantime, you want to change culture in the banks. Hit them where it hurts, in the pocket. You get some of these high profile determinations done, the bank, the board, I can tell you, will be putting a hell of a lot of pressure on the CEO. The CEO will be putting pressure on his underlings to say, you know, "We don't want to be up for hundreds of millions of dollars, we've got to sort this problem out."

JEREMY FERNANDEZ: Well, what the past tells us is that a dozen and a half inquiries, as you say, a dozen and a half inquiries have produced very little change by the banks. Is it not optimistic to expect that the banks are going to feel ashamed just by being named? They've been named before and nothing's changed.

WARREN ENTSCH: You hit the nail on the head. A dozen and a half inquiries before, and a dozen and a half enquiries in the future are not worth a cup full of cold water. But you get these victims out there and get enforceable determinations on these victims and showcase those. Put it out there in lights for everybody to see, and then put the penalty on top of that for the banks to have to pay. You'll get their attention, I promise you. And you will start to see that change.

JEREMY FERNANDEZ: Now, some Liberal backbenchers are saying that corporate tax cuts shouldn't apply to the banks. What do you think of that idea?

WARREN ENTSCH: I think that's absolute nonsense. It's a bit like having as we've had to deal with GST. You've exceptions here and exemptions there, and at the end of the day you've quite a complex system that really is difficult to administer. I think that, you know, my view is that they should be getting it, and I'm a very strong supporter of reduction in corporate taxes. Any of the countries that you see, comparable countries, the three things you've achieved out of reductions in corporate tax.

First of all, you've seen an increase in profits. The second thing that you've seen there, which is equally important, I think, is that there's been a very significant increase in employment. And the third thing is there's been a very significant in tax revenue. So, you know, why would you exempt the banks from that? And, you know, we need our banks to be profitable. And the fact that some of them are posting pretty significant profits now means to say that there is a good chance that they're, well, they're going to have to be able to afford to pay the penalties of some of the victims that I'm aware of.

And, you know, we need our banks to be profitable, but we need our banks to make their profits in an ethical way.

JEREMY FERNANDEZ: Is it a helpful point of view then for a Liberal backbencher or a Coalition backbencher to put forward this proposal against the government's policy?

WARREN ENTSCH: Well, look, I mean, you're going to have to ask George that there. I'm not... If you're going to ask me here tonight whether I'm going to go and bash up on George, I mean, I'm not going to do it. George and I have our moments, believe you me, we have our moments. But I'm not going to debate him on national TV. Anything I 've got to say to George I'll pull him into his room and we'll have it behind closed doors.

JEREMY FERNANDEZ: This is a measure of disunity though, isn't it? Do you feel that it's bleeding goodwill from both the major parties into the minor parties and independents?

WARREN ENTSCH: This is not so much about a Liberal or Coalition issue, this is more about a issue between the two major parties - the Coalition and the Labor Party. This is where the problems are, when both sides over time have been guilty of just refusing to negotiate anywhere. And effectively, the voting public are saying there's a pox on both parties.

And so, what they're doing, of course, is they're saying, "Well, if you're not prepared to negotiate with each other, if you're not prepared to do it together, we're going to put you in a position where you've no choice but to negotiate with somebody else." And, of course, this doesn't make for good governments. And if common sense prevails and if we're going to talk about, you know, the national interest, then the major parties will start talking together, they will start realising that they will do the best for change, and I'm saying both sides, I'm not picking one side or the other, they do the best that they can in relation to formulating that policy and at some point say, "Well, look, we can't do it. We can't improve it anymore, we're not happy with it, we oppose it, we will change it if and when we get into government," but allow the government to continue to govern.

JEREMY FERNANDEZ: When you're talk about the lack of cooperation between the parties, is it helpful when the Treasurer is pushing back on the appointment of a former Labor Queensland Premier, Anna Bligh, to head the Bankers Association, and suggesting that instead of dealing with her directly, the Government will just go and deal with the banks directly?

WARREN ENTSCH: Well, you're telling me something that I was totally unaware of. And having said that, of course, Scott is entitled to his view. He obviously knows more about it than I do. But having said that, I mean, it's entirely up to the bankers who they want to represent them, to put their point of view. I can understand, I suppose, you know, if you get a former pollie, at least they understand the process.

But I don't how much credibility it gives the banks under the current circumstances. I don't how much leverage it will give them.

JEREMY FERNANDEZ: Warren Entsch, thank you.

WARREN ENTSCH: Thank you very much indeed.