MPs defied lobbyists and spin to produce punchy report on banking sector

Friday, 29 August 2025

All the political parties are now on board with major reform of the dysfunctional banking sector, says Kent Duston of the Banking Reform Coalition.

Kent Duston is the convener of the Banking Reform Coalition, which is advocating for structural separation of the banking industry.

OPINION: Last week the Finance and Expenditure Select Committee released a fulsome 86-page report into banking competition, the result of 14 months of cross-party work and hundreds of submissions. And in its own quiet way, it’s a doozy.

Now, wading through select committee documents is not everyone’s idea of a fun afternoon, but I can report that it’s well worth the read – at least, if you care about the parlous and expensive state of our third-world banking system. Because the select committee has said all the quiet bits out loud.

Lambton Quay - seen here in normal times - played host to “whole platoons” of bank-funded lobbyists as they made their way to Parliament to speak to the Finance and Expenditure Select Committee.

It’s said that our banking system is uncompetitive, that the Australian-owned banks are making too much money, and that the Reserve Bank needs to get its act together, and it’s delivered a pretty strong message that Parliament is running out of patience on open banking. And in doing so, it’s doubled down on the findings of last year’s Commerce Commission report and written some pretty pointed recommendations.

What makes this remarkable is that the select committee has almost entirely resisted the blandishments of the banking lobbyists in doing so.

Having participated in the submission process, I can confirm that it was almost impossible to walk down Lambton Quay without weaving a path between and around whole platoons of bank-funded lobbyists, all anxiously headed in the direction of ministerial offices. Yet – to its credit – the select committee has largely ignored the unrelenting spin, and told it like it is.

That’s not to say the report goes far enough or fast enough. As the select committee itself points out, the inquiry’s recommendations are unlikely to be a silver bullet for competition, and it now falls to the various government agencies to determine how to implement and respond to these. So much more work needs to be done, and preferably at pace.

But I couldn’t help but hear the echo of the findings about Telecom New Zealand in the report. Back in the 2000s, we had an expensive and uncompetitive telecommunications industry ruled by an unresponsive monopoly, and after reports exactly like this one – strong recommendations, the requirement for both the sector and officials to report back – Parliament eventually ran out of patience, and legislated to break up Telecom. The country and our telecommunications industry has never looked back.

So better days are coming – except if you’re the chief executive of an excessively-profitable Australian-owned bank, that is. If a veritable army of lobbyists equipped with Parliamentary access cards can’t save you from a damning select committee report and a requirement to front up and explain yourself every six months, then the cozy days of profiteering are definitely drawing to a close. It can’t come too soon.