Banks in for hard labour up to poll

POPULOUS posturing by pompous politicians is going to infuriate us all the way up to the Federal election. No sooner had the government confessed to garrotting small business with red tape, than the opposition has lumbered up to attack big business.

If you see a bandwagon rolling it is generally too late. But not for bank bashing apparently. We all have horror stories about these institutions. Many of them are not about bank charges, but the way in which management has hidden staff behind voice mail walls, alienating frustrated customers.

Bankers seem to have heeded part of the message. Hence their 10-point plan, including disclosure of ATM fees, no-frills accounts, and a recognition that the poor exist, through an offer to make free accounts available to five million welfare recipients. The response was a big step in the right direction.

Not according to Kim Beazley. He wants a “social charter” forced on the banks, including fines levied on those that failed to provide affordable services, and the creation of yet another watchdog outfit to monitor the private sector.

Labour is apparently just warming up. Beazley has trailered a crackdown on “obscene” salaries drawn by company executives in return for mediocre performance. He has donned a suit of armour as the white knight who will slay the dragons that dwell at the top end of town.

Whingeing that the banks made more than $9 billion profit last year, he says: “the time has come for the ordinary Australian consumer to be properly served by such a profitable group.”

Perhaps a fair point. But is it a vote catcher? It just happens that “ordinary consumers” make up most of the 700,000 shareholders in CBA. Beazley may recall it was he who privatised that bank. Then there are another 365,000 voters who are on the share register at NAB, not to mention Westpac, ANZ and the regionals. Brokers Merrill Lynch were stunned that Labor would reregulate the banks if it got power. Their back-of-the-envelope calculation that such a move could wipe a hefty 14 per cent off the banks’ market value triggered some hefty sell orders from the US.

More than 40 per cent of Australians own shares directly or indirectly. Many of them resent politically motivated shots fired at their investments.

Beazley is on slightly firmer ground with his criticism of fat cat salaries. The politics of envy are generally a winner. If you are wondering what is obscene, consider the US$127 million wages drawn by Citigroup chairman Sanford Weill last year.

A recent survey showed that the top CEOs in Australia earned what The Age newspaper called a “staggering” $2.2 million average pay last year. It is difficult to say what is too high for qualified people often working a 70-hour week. What we can say with absolutely certainty, is that no top-flight overseas corporate honcho would come to this country for anything remotely like that money in our crumpled dollars.

Briefcase is completely apolitical where business is concerned. We just wish that both sides could put a first rate team on the oval – not the Third XI.

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