Opinion

Common Wealth or all for self?

Recent insurance and financial advice scandals highlight the loss of a commitment to the Common Wealth.

By Gordon Preece

April 29 2016After the recent ABC/Fairfax CommInsure exposé we should ask: Does our privatised, financialised society, which once ran a government bank called the Commonwealth Bank, still believe in a concept of Common Wealth or common care and responsibility?

The Comminsure case needs connecting (as media and our ADHD minds largely haven’t) to the relatively recent controversy concerning the Commonwealth and other banks’ (e.g. Macquarie) similar savage exploitation and robbery of the elderly’s savings through shonky financial advice.

This raises broader issues about bank ethics, finance and superannuation industries, multinationals’ rampant tax avoidance, plus the recent BHP Billiton mining disaster in Brazil, destroying a whole town and ecosystem. How should Christians, whose super is often invested in such companies, respond to our partial and often ignorant complicity in these corporate crimes?

The Commonwealth Bank’s insurance arm was exposed by The Age and ABC whose ability for investigative journalism is being reduced. They were aided by courageous whistleblower Dr Benjamin Koh, Comminsure’s former chief medical officer. Comminsure, and also AMP and Zurich, were found to be using outdated, more restrictive definitions of severe medical conditions like heart attack, arthritis, depression and post-traumatic stress disorder (PTSD). “Comminsure delayed or denied payments to terminally ill patients and claimants – including … its own employees – of total and permanent disability payments” (The Age, 18/3/16, 6).

The Australian Prudential Regulation Authority (APRA), includes, like other financial institutions, the cardinal virtue of prudence or long-term measured judgement in its name: the very opposite of hubris, or pride-full, reckless pursuit of profit at all costs. It sees the CommInsure case as symptomatic of certain systemic, cultural corruptions rife in the financial industry. It is not enough for the Commonwealth and co. to blame a few rogue employees or financial advisers. It’s not just bad apples but often a bad or biased barrow, leaning towards maximising profit at the expense of customers.

We can join the dots from CommInsure to the Commonwealth financial advisers scandal. Here untrained, unprofessional advisers hell-bent on maximising their earnings forced and even forged uninformed consent to high risk investments, for people only wanting retirement security. As APRA says, cultures of corruption are related to reckless and risky remuneration incentives.

Given Jesus’ rejection of the hypocritical Pharisees’ encouragement of Corban (religious gifts), to enrich their coffers at the expense of the elderly, one wonders what withering condemnations Jesus would utter about such pharisaic, dodgy definitions and practices denying the sick and elderly their rights today.

The Global Financial Crisis was not a once-off event but is a chronic condition. As one London trader said, we’re like goldfish, one lap round the bowl and we’ve forgotten any lessons learnt. Even more so considering the slap on the hand regulatory responses for “too-big-to-fail banks”, and the enormous unmerited rewards many received in our system of golden parachutes or socialism for the rich.

The financialisation of the world economy away from productive and job-creative industries in favour of the 1 per cent speculative and rentier class now owning 60 per cent of the world’s wealth is super-charging global inequality (see Piketty, Capital). Traditional financial institutions have shifted from secure managing of people’s money to risky, speculative financial maximisation, not firstly for their clients, but their corporate coffers. This gargantuan appetite for risky growth is unsustainable in social and ecological terms. Witness BHP-Billiton and its Brazilian partner’s disastrous dam tailings failure — again an area where BHP has form — remember the Ok Tedi copper mine in Papua-New Guinea which destroyed the area’s ecology and the people’s livelihoods.

The limited liability covenant or social contract between banks, big corporates and society has broken down. In exchange for enabling capitalisation for responsible risk investment, without personal bankruptcy, so that jobs could be created, taxes paid for the roads and education of workers, we now have irresponsible risk, without any sense of common wealth or commons, both economic and ecological.

Further, multinationals shift earnings from one higher taxing locality to a lower one, and hide their profits. Last month it was revealed that one third of Australian listed private companies worth over $250,000,000 pay no tax. So much for “render unto Caesar”! And so much for any notion of Common Wealth.

The Revd Dr Gordon Preece is Chair of the Melbourne Anglican Social Responsibilities Committee and ethical advisor to award-winning Christian Super. He is director of www.ethos.org.au

What can Christian investors do to bring about change?

  • Get informed about where your super is invested e.g. in ecologically destructive coal? Reduce Anglican Church investments in such industries, as Synod has moved.
  • Argue for whistleblower protections for those like Dr Koh regarding Comminsure, or Dennis Gentilin of NAB regarding Forex Trading
  • Support a financial services tax to put a handbrake on the rate of financial speculation
  • Engage like the Victorian and Tasmanian Uniting Church Synod did successfully with corporates like BHP over Ok Tedi or as Christian Super – as part of the Australian Religious Investors group – did successfully with Wesfarmers on another issue. Mistakes happen, but resolution to amend and make restitution is critical (cf. Zaccheus in Lk 19).
  • Affirm positive models of Christian corporate leadership like the newly retired CEO of Medibank Private George Savvides.
  • Demand the government drop its offensive plan to cut corporate taxes; How can you cut what is nothing in many cases? Revisit Mr Hockey’s plan, and that of many Christian and other justice groups, to stop global corporate tax evasion.
  • Support the Australasian Centre for Corporate Responsibility (www.accr.org.au); appeal against a court judgement allowing the Commonwealth Bank to not allow shareholder resolutions to make it disclose its fossil fuel investment levels. Australian shareholders need similar rights to the US which enable greater corporate democracy.