Read or listen to my interview with Linda Mottram on ABC 702.

Audio of interview on ABC 702

Topics: first day back in Parliament, jobs cuts in banking industry



LINDA MOTTRAM: It’s coming up to five to nine. First day of Federal Parliament today and Bill Shorten will be there as the Minister for Financial Services among his colleagues in the front row. Bill, good morning, thanks for joining us.

BILL SHORTEN:     Good morning Linda.

LINDA MOTTRAM: First day back of parliament, it’s probably going to be fairly lively isn’t it? Let’s get the obvious out of the way. The opposition will be mentioning Craig Thomson a lot and trying to exploit leadership issues, I would have thought.

BILL SHORTEN:     Oh, they may do that and that would be predictable. But that doesn’t really help advance the nation’s interests. What I think or what I believe fundamentally is that what Australians want us to do is talk about how we help inoculate Australia against the turmoil in Europe. Are we going to see lower interest rates, what’s the impact on our family payments and our personal tax cuts, how that’s been affecting people. What are we doing to help promote a national disability insurance scheme.

There are a lot of good positive ideas which will help families make ends meet and that’s what I think parliament will be debating this year.

LINDA MOTTRAM: Now shortly we’re going to be speaking to Steve Munchenberg who is a former Deputy CEO of National Australia Bank of course and is now Chief Executive of the Australian Banker’s Association, just about the range of issues around banks at the moment.

You have expressed displeasure last week at the massive job cuts at Westpac. I mean Westpac lives in a real commercial world. They make real commercial decisions. That’s simply the reality isn’t it?

BILL SHORTEN:     Well Westpac lives in the real world but so do their customers and so do their employees. You know with - financial services is increased in terms of the number of people it employs over the last few years. It is tough this year and companies do have the right of course to run their businesses according to what they think is important to shareholders and stakeholders.

But let us not have corporate amnesia. One of the reasons why the big banks are doing well is because during the Global Financial Crisis, the Labor Government backed the banks, which was the right thing to do. So effectively it was the taxpayer saying we will guarantee the stability of the banks.

Now the banks have done well and they’re making great profit. You know there’s an old saying, don’t forget the one who brought you to the dance and the bank’s success is not done on some island separate to the continent of Australia. It’s through the support of the tax payers. And the other thing which I often see with employers is that sometimes they’ll cut back. Then a year or two later, they’ll start rehiring. So sometimes people make short term decisions.

I’m not saying that’s the case in every job loss. But sometimes they make short term decisions. I think the final thing I’d say about the banks is if you're going to let people go, just don’t put them on the scrap heap.

What are you doing to help them retrain and redeploy? I get that there’s no such thing as a job for life anymore. But what I do believe is that employers should be supporting their employees and constantly training them so they’re ready for their next job.

LINDA MOTTRAM: It’s the off-shoring of jobs that annoys a lot of people as much as anything else, isn’t it? I mean but you just can’t prevent that from happening.

BILL SHORTEN:     We’re going to see several trends in the Australian workplace over the next fewyears. We live in an increasingly borderless world. We’ve got the internet allowing things to be done in different countries which previously might have been done in one country.

Of course with that, there’s always concerns about data protection and privacy. And I think the banks will need to clearly explain to people how they’re protecting people’s personal information.

Beyond that though, I think our financial services, and I get on very well with a lot of the people who run these businesses and I’ve got a lot of respect for them, but I think that they need to be ambitious for Australia. They need to have a view that we’re not just a retail network of banks. That we need to deepen our back office functions, that we need to deepen our skill sets.

So I think that it’s important that there is - workplace relations and the future are intimately linked. The most successful businesses in the world are the ones that invest in their people, the ones that make their employees feel like their employer has a plan for them and they’re not just a number.

LINDA MOTTRAM: I’m sure the banks would say that they’re investing in their people. It’s just that they need to make choices about what they can do here, what they can do somewhere else.

BILL SHORTEN:     That’s right Linda and you work for a radio station. We see it in the media, we see it in politics. We see it in manufacturing, we see it in banking. Sometimes some companies will make short term decisions based on short term imperatives and not long term decisions based on long term imperatives.

My view about the future of Australia is financial services will continue to grow. We’re lifting compulsory super from nine to 12 per cent. There’ll be more money to manage than ever before. The jobs will grow there as they’ll grow in other services areas.

So I just think sometimes - the easiest thing sometimes to do is just move people off your books. Whereas I think sometimes if you take a longer investment attitude in people, you tend to get better productivity, better loyalty. I think what I’m saying is just common sense actually.

LINDA MOTTRAM: Paul Keating has notably talked about separating the casino from mums and dads banking. Do you have any sympathy for that?

BILL SHORTEN:     I always listen carefully to what Paul Keating says. Oh no, I can see what he’s saying.

LINDA MOTTRAM: But that’s a concern isn’t it? You know people feel like the cradle to the grave role is being sacrificed on the altar of huge profits.

BILL SHORTEN:     Well you know it’s easy perhaps for politicians, current politicians, to go to extremes. Banks do have to make a profit. They offer good deposit rates for older people who might have their money tied up in banks rather than people paying off mortgages.

I do get concerned that banks concentrate on the mortgage rate which is appropriate but they also need to look at the rates that they’re charging for credit to small business. I just think the point is, I’m a student of history and business theory often goes like fashions. You know that comes into fashion and moves out of fashion.

When they brought in the ATMs, we started to see the demise of the branch. Now people have realised the banking sectors want to bring the branch back. I’m just saying if you send everything offshore, then sooner or later you’ll want to bring it back onshore. So long term not short term should be the order of the day.

LINDA MOTTRAM: Sorry Minister, lovely talking to you, knocking up against the news.

BILL SHORTEN:     Of course. Thank you.

LINDA MOTTRAM: Bill Shorten there, thanks very much. It’s nine o’clock.