“We have royal commission powers in situations like this and we plan to use them. We will conduct hearings and will use the powers set out in our legislation to require banks to appear and to provide us with the documentation that we need to thoroughly conduct this inquiry.”
The banks’ treatment of small-business customers will be examined by Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Ms Kate Carnell, who will conduct hearings in the coming weeks to gather evidence regarding cases of alleged unconscionable conduct.
During an investigation into the nation’s banks, the Parliamentary Joint Committee on Corporations and Financial Services heard from various small businesses severely impacted by questionable banking practices.
The Minister for Small Business Michael McCormack has asked the Ombudsman to look into these cases and determine whether subsequent government and industry reforms have done enough in addressing their problems and others like it.
“We have royal commission powers in situations like this and we plan to use them. We will conduct hearings and will use the powers set out in our legislation to require banks to appear and to provide us with the documentation that we need to thoroughly conduct this inquiry,” Carnell said.
“There have been reforms made in this space, but what my office will do is make sure these changes go far enough to ensure small businesses are safeguarded against banking misconduct. I’ll be making recommendations to the government – and potentially to the banks as well – about possible changes, whether it be legislative, regulatory or even cultural, that may still need to be made to help prevent these sorts of situations happening in the future,” Carnell said.
“We’re not in any way suggesting small businesses shouldn’t pay their debts; this is about addressing the imbalance of power between banks and small business owners, who in some cases have lost everything because their banks are basically riding roughshod over them,” the official said.
“I’ve made the point in the past that small businesses who are at loggerheads with their banks over their finances, need a solution to their problem sooner rather than later. A royal commission may help mum-and-dad small businesses air their grievances but it won’t save their business,” Carnell said.
Carnell concluded: “Anything short of immediate action threatens the survival of small businesses who are struggling right now, and it’s my intention to ensure small businesses facing financial difficulties are given the help they need now, to allow them to survive and thrive.”
Inside Small Business
