Don Chipp launched the Australian Democrats in 1977 with his now infamous commitment to “keep the bastards honest.”
Readers might claim this catch-cry is still a relevant yardstick to measure the current political climate.
But it could also, just as easily, be extended to the Australian banking sector in the 21st century.
Since the deregulation policies of the Hawke Government enabled banks to widen their scope, the financial sector has grown into a Goliath of commerce, with an unprecedented stranglehold of the market place.
It is estimated the Commonwealth Bank, Westpac, National Australia Bank and ANZ will report combined profits of $29.7 billion this year.
For four years in a row, our major banks have recorded better returns than lenders in 10 major developed countries, including Canada, the US, Britain and Europe.
So where is a social license to operate buried among the Australian banking sector’s dazzling mountain of money?
This week I stood on the floor of the Senate chamber and again spoke out about the complacency and arrogance of the banks in refusing to participate in a rural debt survey.
Such a survey would provide a vital platform to understand the true extent of the rural debt problem and enable public policy and social services to be better directed to those who most in need.
The Australian Bankers’ Association has espoused a steady stream of excuses in recent months as to why the banks are refusing to participate in proposed surveys in Queensland and New South Wales.
One of the major complaints is that the process costs the banks too much.
It is a disingenuous claim, given the world-beating profits of the bankers.
Equally, it is an offensive statement to the thousands of landholders who are being forced to tighten their belts more and more, with little else than hope and perseverance pushing them to hold on for another week or month.
At a time when Australian agriculture is looking to capitalise on the economic spoils of “The Asian Century,” we find ourselves confronted with a sector hampered by unsustainable debt loads and stagnant earnings.
Australian agriculture is existing in a space where, increasingly, the value of farm production is being significantly outpaced by the levels of farm debt.
In 1980, output per dollar of debt in Australian agriculture peaked at $3.12.
By 2010, output per dollar of debt had fallen to just 64 cents.
This debt issue is no more evident than in my state of Queensland where the latest available figures indicate total rural debt is $16.97 billion, more than half of which is with the vital beef sector, which has spent years struggling under drought, flood, fire and the 2011 Live Export Suspension.
The warnings signs are glaringly obvious despite the Australian Bankers’ Association steadfast claims there is no rural debt crisis.
Australian farm debt has increased by almost 75 per cent in a decade – from A$40.3 billion in 2004 to an estimated A$70 billion in 2014.
Land purchase is the largest single contributor to the increases in farm debt over the past two decades.
We are now experiencing the fallout from the “get big or get out” mantra.
MLA’s recently released Northern Beef Situation Analysis reports that the majority of northern beef producers are not generating profits sufficient to fund current and future liabilities.
The report states that across all 14 regions surveyed – stretching from the Queensland/New South Wales border to Central Western Australia – have reported average business returns of -2.9 per cent between 2010 and 2012.
The double lives the Australian banks are living are coming under increasing scrutiny as the divide between their public façade and their masked intentions begin to show cracks.
Questions have again been raised about honesty and integrity of our bankers with the release last week of a Senate report into fraud, forgery and cover-up in the financial planning division of the Commonwealth Bank.
Away from their public statements of contrition, we can only presume the head honchos at our major banks are reviewing their social license to operate policies.
Admitting there are concerns about rural debt loads and agreeing to assist in a survey would be a reasonable start.
It would provide some direction in the effort to address the current troubles confronting the agriculture sector.
Only a pigeon knows how to get to where it is going when it doesn’t know where it is.
Landholders across the nation expect the banks to clear a pathway for a rural debt survey.
And their collective patience, like their capacity to survive this financial crisis, is running thin.