The Banking Royal Commission

[Dry Rot]

Seems that we going to get a RC which won't be examining a key dangerous behaviour of the banks

Why banks don't want property lending scrutinised

Real estate has turned our banks into global money-making machines, delivering returns institutions elsewhere look upon with envy.

So, it's not too big a stretch to question — given their unconscionable behaviour in other areas — whether lending standards over property have been undermined by the insatiable demand for earnings during the property boom of the past five years.

Stories about forged loan documentation, with borrowers urged to inflate incomes, have been rife for years. No-one, however, knows the true extent of the problem. To a large extent, no-one really wants to know.

http://www.abc.net.au/news/2017-11-...operty-lending-to-fall-under-scrutiny/9211376

 

[Admiral Byng]

So what is the banking RC for??

 

[Taylor]

I think they want to find some grubby emails that talk about squeezing out more profits from middle class Australia so the government can look like heroes putting in a profit tax on the banks, the banks will spend millions on TV ads about it costing jobs and hurting super funds so they will need some pretty serious dirt.

Something like a group chat with all the banks laughing about avoiding tax and being able to afford to pay far more to the country.

 

[Dry Rot]

So what is the banking RC for??

What else?

Peter Dutton says royal commission a chance to investigate union links to super funds

https://www.theguardian.com/austral...nce-to-investigate-union-links-to-super-funds

 

[Admiral Byng]

What else?

Peter Dutton says royal commission a chance to investigate union links to super funds

https://www.theguardian.com/austral...nce-to-investigate-union-links-to-super-funds

You mean like industry super funds, and Australian Super and mobs like that?

 

[Dry Rot]

You mean like industry super funds, and Australian Super and mobs like that?

Yep.

They apparently have a cunning long term plan of providing higher long return returns to members and then will [insert Dutton conspiracy ]

 

[Ripper]

Maybe they can look at why the RBA is not accountable to the parliament and following on form that the Voters that elect the Parliament.

 

[Benny78]

They've already avoided wage inflation and destroyed full time employment positions. What else of the workers remains to be sucked dry other than super? Besides assets that aren't owned (only the bank can steal those) employers would be hoping to steal peoples super and put it back into the budget by some means to convert into more tax cuts.

 

[Taylor]

I've thought for a while that the government could argue that requiring all super funds to purchase a minimum percentage of their funds in new Federal Debt Bonds would allow the government to wipe out the $14 to $20 billion a year we spend on interest and claim to pay that money instead into healthcare for the next 20 years as the boomers hit the wall.

They would make it both a legal requirement to buy them, award themselves the ability to change the terms of the deal (such as interest parents to the bond holders or the length of the term before maturity).

$2.05 trillion dollars at the end of 2015. National debt is about $600 billion.

25% of all funds must buy these new bonds, debt gone, boomers looked after medically.

It wouldn't be popular, but that's not the point.

 

[Pessimistic]

I've thought for a while that the government could argue that requiring all super funds to purchase a minimum percentage of their funds in new Federal Debt Bonds would allow the government to wipe out the $14 to $20 billion a year we spend on interest and claim to pay that money instead into healthcare for the next 20 years as the boomers hit the wall.

They would make it both a legal requirement to buy them, award themselves the ability to change the terms of the deal (such as interest parents to the bond holders or the length of the term before maturity).

$2.05 trillion dollars at the end of 2015. National debt is about $600 billion.

25% of all funds must buy these new bonds, debt gone, boomers looked after medically.

It wouldn't be popular, but that's not the point.

You might as well reinstate a full pension and medicare gold

 

[Slax]

Heard from inside a bank that the banks decided an RC called by the Coalition would be the lesser of two evils. The ALP will win the next federal election, Turnbull is dead and the options are no better, this would mean an RC set up on the terms of the ALP and Greens, so it will have far more powers and be much better funded.

 

[Power Raid]

when do we learn of the scope?

 

[Bollox]

A complete and utter waste of time this will be.
I see no need for it.

 

[Ratts of Tobruk]

I've thought for a while that the government could argue that requiring all super funds to purchase a minimum percentage of their funds in new Federal Debt Bonds would allow the government to wipe out the $14 to $20 billion a year we spend on interest and claim to pay that money instead into healthcare for the next 20 years as the boomers hit the wall.

They would make it both a legal requirement to buy them, award themselves the ability to change the terms of the deal (such as interest parents to the bond holders or the length of the term before maturity).

$2.05 trillion dollars at the end of 2015. National debt is about $600 billion.

25% of all funds must buy these new bonds, debt gone, boomers looked after medically.

It wouldn't be popular, but that's not the point.

What would be the advantage of that over just a straight tax? You're making them spend money anyway, and it may put a few clouds over our economic situation as it could be alleged to be held up through substantial economic intervention. And excuse my missing the subtleties, but bonds are debt, so are you saying Super funds should buy our debt off us? Because obviously if they bought bonds, we still have to pay them back, and pay interest on that, so the debt wouldn't change and the interest wouldn't change, except now they're accepting totally flexible terms (just a wee bit of 'sovereign risk' there)...?

 

[Taylor]

What would be the advantage of that over just a straight tax? You're making them spend money anyway, and it may put a few clouds over our economic situation as it could be alleged to be held up through substantial economic intervention. And excuse my missing the subtleties, but bonds are debt, so are you saying Super funds should buy our debt off us? Because obviously if they bought bonds, we still have to pay them back, and pay interest on that, so the debt wouldn't change and the interest wouldn't change, except now they're accepting totally flexible terms (just a wee bit of 'sovereign risk' there)...?

The super funds already exist in the safety of a legislative requirement to invest, all my suggestion was doing is working that a bit further.

I was exactly saying the super funds buy the debt off us. Initially the people who pay for it more are those who benefit from the extra government spending into health.

A new tax would create money long term but a tax isn't politically palatable, and takes time. Requiring the suggestion I floated instantly solves that issue, effectively renegotiating our debt to a new tiny interest rate.

The post was mostly in jest but that industry is propped up with 10% of income by law to serve a government purpose so adapting it to suit another isn't that much of a stretch, especially when the utilisation of tax minimisation through super has seen a lot of unjust enrichment, for what the purpose of super was.

Its the SMSF that would kick up the most fuss.

 

[Ratts of Tobruk]

The super funds already exist in the safety of a legislative requirement to invest, all my suggestion was doing is working that a bit further.

I was exactly saying the super funds buy the debt off us. Initially the people who pay for it more are those who benefit from the extra government spending into health.

A new tax would create money long term but a tax isn't politically palatable, and takes time. Requiring the suggestion I floated instantly solves that issue, effectively renegotiating our debt to a new tiny interest rate.

The post was mostly in jest but that industry is propped up with 10% of income by law to serve a government purpose so adapting it to suit another isn't that much of a stretch, especially when the utilisation of tax minimisation through super has seen a lot of unjust enrichment, for what the purpose of super was.

Its the SMSF that would kick up the most fuss.

But our debt is already in bonds. So the debt wouldn't go away. You're saying we refinance at lower interest rates, so the debt remains, but the pay back is delayed by, say, a decade...? And as others have bought it they have to pay the previously agreed deals? Presumaby they are buying it at less than the value of the bond or is it working like a tax?

Given interest is so low in the world why don't we just borrow at 0% or at those negative interest rates and pay off our debts while we're at it? Somehow I think this isn't how bonds and debt work... I still remember when Howard/Costello 'paid off' our debt we still had around $60B of bonds. Debt isn't really considered a problem, it's the serviceability that gets economists concerned if a debt grows too large.

 

[Taylor]

But our debt is already in bonds. So the debt wouldn't go away. You're saying we refinance at lower interest rates, so the debt remains, but the pay back is delayed by, say, a decade...? And as others have bought it they have to pay the previously agreed deals? Presumaby they are buying it at less than the value of the bond or is it working like a tax?

Given interest is so low in the world why don't we just borrow at 0% or at those negative interest rates and pay off our debts while we're at it? Somehow I think this isn't how bonds and debt work... I still remember when Howard/Costello 'paid off' our debt we still had around $60B of bonds. Debt isn't really considered a problem, it's the serviceability that gets economists concerned if a debt grows too large.

I'm not actively campaigning for it.

There is a mountain of money being saved under the guise of replacing the pension and an entire industry built around it to help people still get their maximum pension and have a swimming pool of cash. Meanwhile we burn $16,000,000,000 a year.

I think someone will run the numbers and see if the extra pension paid to supplement the loss of income works out better than spending $16B a year to get nothing.

And yes, it would be a dance of debt movement but I'd be making it 99 years at 0% interest with endless options for renewal, so it's debt on paper only. Inflation will take care of it.

 

[RupieDupie]

I would not be able to comment on this respectfully. Can I be banned from this particular thread before I call them all a pack of dirty c-unts and start mentioning guillotines and Guantanamo Bay.

 

[Dry Rot]

And yet another Politics Board thread goes way off topic down a rabbit hole....

 

[Ratts of Tobruk]

I'm not actively campaigning for it.

There is a mountain of money being saved under the guise of replacing the pension and an entire industry built around it to help people still get their maximum pension and have a swimming pool of cash. Meanwhile we burn $16,000,000,000 a year.

I think someone will run the numbers and see if the extra pension paid to supplement the loss of income works out better than spending $16B a year to get nothing.

And yes, it would be a dance of debt movement but I'd be making it 99 years at 0% interest with endless options for renewal, so it's debt on paper only. Inflation will take care of it.

I didn't think you were. I was just trying to get clarity on what you were proposing. 99 years at 0% interest is a very big tax. Given it's our retirement funds, and such a long period of 0% would therefore effect the youngest (and unborn) the most, while also slamming the growth of Super for people who need it now or in the next few years (due to the billions of dollars of outlay required for no return in their lifetime), I think it would be hugely unworkable as a policy.

 

[Taylor]

I didn't think you were. I was just trying to get clarity on what you were proposing. 99 years at 0% interest is a very big tax. Given it's our retirement funds, and such a long period of 0% would therefore effect the youngest (and unborn) the most, while also slamming the growth of Super for people who need it now or in the next few years (due to the billions of dollars of outlay required for no return in their lifetime), I think it would be hugely unworkable as a policy.

At least there would be some return in the form of public services spending. Currently every person in Australia pays $663 a year burning money.

That's $16B / 24.13 million people

The really interesting calculation would be: (very rough estimations and I'll try and detail all of my assumptions)

ABS stat shows 8,630,428 households, 3,155,687 mortgages. Profit of the big four banks = $15,000,000,000 in the first half of the year, we will double that.

Therefore, if the profit of the banks was purely down to the mortgages it held 30,000,000,000 / 3,155,687 = $9506 per mortgage per year.

$182 per week.

How could you reduce the cost of living for 34.5% of the population? (the amount who hold a mortgage)
Not for profit banks.

 

[Ratts of Tobruk]

At least there would be some return in the form of public services spending. Currently every person in Australia pays $663 a year burning money.

Yes, but to do it, everyone's Super would effectively go down 20%. And that wouldn't be assets dropping by 20% of value (and therefore being recoverable when the economy picks up, as per the GFC losses), it would be a loss of 20% of money for 99 years and with 0% interest versus inflation, then the actual value of the bonds at that 99 year deadline would very likely be a long way under 50%. That would have to be compared with the $663 that you say is 'burnt money' every year, but actually is a payment to a bond holder for giving us cash to do things. i.e. We do get public services for that spend. That's exactly what it is for. That and sending Bronwyn to Geelong on a Helichopper. Remember that, while the Howard/Rudd tax cuts, are meant to be the things that put the budget out of whack, a lot of the spending is still permanent useful things, like roads, school & school buildings, public transport, hospitals, insulation etc.

But we better wrap it up before DR gets too annoyed.

 

[Bombermania]

At least there would be some return in the form of public services spending. Currently every person in Australia pays $663 a year burning money.

That's $16B / 24.13 million people

The really interesting calculation would be: (very rough estimations and I'll try and detail all of my assumptions)

ABS stat shows 8,630,428 households, 3,155,687 mortgages. Profit of the big four banks = $15,000,000,000 in the first half of the year, we will double that.

Therefore, if the profit of the banks was purely down to the mortgages it held 30,000,000,000 / 3,155,687 = $9506 per mortgage per year.

$182 per week.

How could you reduce the cost of living for 34.5% of the population? (the amount who hold a mortgage)
Not for profit banks.

A not for profit bank would still charge interest, just because something isn't run for profit doesn't meant that it doesn't want to earn a profit, its just a business structure where the profits are spent on that entity just like AFL FC's.

There is an argument for use of a system similar to Islamic banking in which interest is not charged however in its place a type of rent or fee is charged.

Most people with a mortgage are currently ahead of their repayment schedule.

 

[Taylor]

A not for profit bank would still charge interest, just because something isn't run for profit doesn't meant that it doesn't want to earn a profit, its just a business structure where the profits are spent on that entity just like AFL FC's.

There is an argument for use of a system similar to Islamic banking in which interest is not charged however in its place a type of rent or fee is charged.

Most people with a mortgage are currently ahead of their repayment schedule.

Imagine if the bank distributed it's excess profits back to the mortgages. How would that impact the economy? Debt is good for growth but debt for housing is effectively dead and the banks hold the risk on it.

 

[Bollox]

Imagine if the bank distributed it's excess profits back to the mortgages. How would that impact the economy? Debt is good for growth but debt for housing is effectively dead and the banks hold the risk on it.

Unsre what u mean by "excess" profits. They already put over 75% of after tax profits back to us by way of dividends. You suggesting banks should be in business for fun and be inherently weak ?
Either way if they put every ounce of profit after distribution back into mortgages, on current levels that would be maybe $1 in every $300-400ish i;d guess. The CBA alone has a mortgage book that must be well over $400 Billion. Total mortgages in Aust alone must be up around $1 trillion+. So the upshot is i'd guess what u suggested wouldnt achieve anything other than perhaps creating some very big pawn shops.
Total profits of the big 4 might be around $25-30 bill with 75-80% after tax distributed as dividends largely to our super funds. The big 4 banks are also regularly 4 out of our top 5 or 6 biggest taxpayers. Thats not an insignificant contribution as well as u can imagine.