It's sometimes funny how politics works. Just a week ago, Shadow Treasurer Joe Hockey was being widely ridiculed for his stance against the four big banks in Australia. Not even his leader, Tony Abbott was prepared to strongly support big Joe's 9 point plan for reform of the banking sector. And there was widespread speculation that Joe would be replaced. The dour Andrew Robb was obviously on the warpath again.
How things can change in just a week.
Perhaps Joe Hockey missed the mark somewhat when he almost called for more regulation of the big banks. In hasty moments Ive been heard to utter similar things myself. But Joe's sentiments were spot on. And he hit the one issue that the majority of the public would rally behind. Bank bashing.
Its a good topic and very rarely a vote loser.
Joe was being roundly condemned by Wayne Swan, with Julia Gillard calling his plan "economic Hansonism" or something similar. And then for his trouble, the CEO of the ANZ bank Mike Smith spent a couple of days laying into poor Joe. Not a good strategy by Smith. May have sounded good to the shareholders buddy, but push too far and it may just come back to bite you.
For the record, the banks are making major profits. More than they have ever made. And their CEO's are pulling in millions every year in salary and bonus payments. So it was just a little bit rich of Mike Smith to give grief to Hockey. Smith earns more in a week than Joe Hockey makes in a whole year.
The banks just cant help themselves. What they fail to realise is that if they do push too far, they will be subject to greater scrutiny and long term reform. The government knows that the strength of the banks helped Australia during the GFC. But don't think for a moment that they wont seek to curb the bank excesses if it comes down to votes.
This ain't no mining sector. The banks cant run a scare campaign like the miners. If reform comes and their profits are reduced, most Australians would be thrilled. This is despite the fact that much of Australia's wealth is tied up in banks via direct shareholding or in superannuation accounts.
So while all and sundry thought that Hockey was in trouble, he had actually done something that the Gillard Government have been refusing to do. And that is to shine a spotlight onto the four big banks. Hockey is right. It's all well and good for Swan to come out on the attack every time the majors jack up interest rates more than the RBA's base rise. But if he wont do anything about it, his words are very hollow indeed.
It only took a week for Hockey's point to be proved. When the Commonwealth Bank increased their variable interest rate by 20 basis points more than the RBA, Swan came out and called the move a cynical cash grab. Right on cue, just as Hockey had said.
Yes, just last week the government got stuck into Hockey for his nine point plan. And on the Wednesday after Cup Day, lo and behold, Swan says that yes he too has a plan to help reform the banking sector. It's one he has been working on for months apparently. Sure. But its not finished yet and is scheduled to be released in December.
Whenever it comes and whatever it contains, it is something. And the reason for the Government moving on this issue is in no small part to Joe Hockey. Don't write this guy off yet. And if the banks are brought back into line feel free to thank big Joe. He may well have saved you some money on your mortgage payments.
About Just Grumpy
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