THE Australian Small Business and Family Enterprise Ombudsman has welcomed the Prime Minister’s announcement of a Royal Commission into the banking sector.

Ombudsman Kate Carnell said she hoped the inquiry would examine past cases where small businesses had been unfairly treated.

Ms Carnell said her Small Business Loans inquiry earlier this year had identified numerous cases where small businesses had suffered from questionable conduct.

“The asymmetry in power between the banks and small businesses, together with the conduct of banks particularly since the global financial crisis in 2008, has left many small businesses in a devastating financial position,” she said.

“Many have lost their businesses as well as their family homes, with no prospect until now of obtaining access to justice.

“I’ve been concerned that in some cases there may have been unconscionable behaviour by the banks and this should be examined in the Royal Commission.”

Ms Carnell said there had been significant progress in the past few years towards changing the behaviour of banks, including Unfair Contract Terms legislation and the establishment of the Australian Financial Complaints Authority.

“What’s been missing is the capacity to review past disputes and award compensation,” she said.

“It’s not acceptable that banks called in loans where repayments were up to date.

“Businesses were forced to close, people lost their jobs and entire communities suffered adverse impacts.

“The contract clauses were so one sided there was no constraint on the banks to stop them foreclosing on loans that didn’t fit their risk profile.”

Ms Carnell said the Small Business Loans Inquiry heard cases that clearly showed banks deliberately employed systematic poor and unreasonable behaviour to terminate business loans.

The power imbalance meant small businesses had been denied access to justice.

“Many settlements occurred under duress because borrowers had little choice but to accept the bank’s offer,” she said.

“They could not refinance because cash resources had been drained, they were facing penalty interest and had no negotiating power.

“I hope the Royal Commission probes these past cases and recommends compensation for those who were unfairly treated.”

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THE Queensland Resources Council (QRC) has welcomed the decision by Shell’s $1.7 billion QGC project Charlie to inject up to an additional 90 petajoules (PJ) of natural gas annually to Australian homes, businesses and LNG customers.

QRC Chief Executive Ian Macfarlane said the announcement coincided with the opening of Charlie in the Surat Basin which includes gas wells, pipelines and a gas compression station.

“Charlie created 1600 regional jobs during construction and today’s announcement will see enough natural gas flowing from the project to meet close to half of Queensland’s daily demand,” Mr Macfarlane said.

“Charlie is yet another example of a successful investment into regional Queensland by the resources sector, where state and local governments and farmers support the gas industry, resulting in massive economic benefits for local and state governments as well as farmers and rural and regional communities.

“Queensland’s neighbours must take a leaf out of our book, instead of relying on our state to meet the gap caused by their failure to develop their own gas industries. Gas exploration has stalled in New South Wales, Victoria and the Northern Territory, despite the fact all jurisdictions have their own reserves in the ground.

“According to the ACCC’s own data one PJ is enough gas to supply Wollongong or Penrith or one large industry user for a whole year.

“Shell’s QGC business will add $1.2 billion to the Chinchilla economy over the next 25 years and state wide the gas industry’s contribution to Queensland in 2016/17 was $8.9 billion, supporting 42,938 jobs and spending $3.4 billion in local businesses and community organisations.”

www.qrc.org.au

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ACORNS Grow Australia, one of Australia’s successful fintechs, has welcomed today’s announcement that there will be a Royal Commission into in the banks.

George Lucas, Managing Director, Acorns Grow Australia, said, “We believe an inquiry into the banking industry may help the government achieve its goal of encouraging financial innovation in Australia and the associated positive result for all consumers. We hope this inquiry will aid in levelling the playing field in financial services. To have a strong banking industry doesn’t mean that the banks need to dominate in every financial service offered to the Australian public.”

Acorns Australia has seen rapid growth in 2017 as Australians look for alternative ways to save and invest. The company now has over a A$140 million funds under management and over 350,000 signups. Providing inexpensive access to automating savings, investing and improved financial literacy. Since launch users are generating an average return of 13.3% p.a.*

* From Feb 2016 – October 2017, the average user return is 13.3% p.a. after all fees (but before the $1.25 maintenance fee a month -calculated using IRR methodology) – past performance is not a guarantee of future performance.

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THE Business Council of Co-operatives and Mutuals (BCCM) has welcomed the Royal Commission into Banks and Financial Services as part of a wider package of measures to improve banking for all Australians.

“The government has been emphasising competition as a key plank of improving the banking experience for consumers," BCCM CEO Melina Morrison said. "Before the Royal Commission was announced, it had taken steps to level the playing field for co-operative and mutual banks by accepting all eleven recommendations of the independent Hammond Review over ‘Reforms for Cooperatives, Mutuals and Member-owned Firms’.

“Whilst this Royal Commission is an important step to restoring the trust of all Australians, the government must continue to implement reforms supporting and promoting competition in the banking sector, including the legislative modernisation that will allow credit unions, building societies and mutual banks to meet the growing demand by Australians for an alternative to the shareholder-owned model.

“And we say to all Australians: if you are unhappy with the conduct of your bank, you don’t need to wait for the outcome of the Royal Commission either. The member- and customer-owned banks are award-winning alternatives who already put their customer-owners at the centre of their offering. You can find a mutual bank or credit union that works for you at www.switchdontbitch.com.au"

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