It was a bipartisan vote in 2020 that refused to adopt an amendment to the Financial Sector Amendment Legislation (Crisis Resolution Powers and Other Measures) Act 2018 to explicitly exclude deposits from being used to ‘bail in’ failing financial institutions and stablise the global financial system.
The loss of that amendment, that would have brought certainty to the status of deposits, is indicative of the power of the banking lobby to oppose any change to the status quo! Consequently, escalating Cr Lyon’s motion on a Commonwealth Postal Savings Bank for fear of Council’s support being used for political purposes has the result, as the editor so succinctly put it, that ‘… a good idea gets kiboshed because the people proposing the idea are considered crazy conspiracy theorists’.
There is clear-cut evidence of the success of a post office banking system in Japan. It provides financial security for savings. So why in Japan and not in Australia?
A veteran of the finance industry has made the point that such a system would remove the necessity for the government to bail out the commercial banks. (I would add that since the GFC their modus operandi has shifted aggressively into the derivatives market and the lack of separation of retail from investment banking puts deposits at higher risk.) He then raised the question, why isn’t the Labor Party championing the notion of a post office banking system because the idea fits so well with Labor’s principles? Asren Pugh is asked to explain.