Go into your pocket/wallet/purse and take out a bank note. Make sure it is an Aussie note.
Now look closely at it. What do you see? Do you see the 2 signatures in the corner of one of the sides. Do you know whose signatures they are? They aren’t the signatures of the Prime Minister or of the Governor General. Not the Queen or other representative of the Government or the people.
The signatures on Australian currency belong to the Secretary of the Commonwealth Treasury and the Governor of the Reserve Bank of Australia. The individuals may change, but signing Australian bank notes remains one of the privileges of the office. That with a large salary, generous superannuation scheme and the eventual Companion of the Order of Australia award for …. services in doing the job you are already well remunerated for. Nice work if you can get it.
So basically, Australian currency is signed by 2 senior public servants. How very Australian.
Let’s just segue for a moment.
The ever loved Australian banking systems shares an annual profit pool of over $40 billion and probably more. That $40 billion profit pool is highly dominated by the big 4 banks – ANZ, CBA, NAB and WBC (in alpha order). Throw in Macquarie, SunCorp and Bendigo and you are probably accounting for over 95% of that profit pool.
The profitability of the big 4 Australian banks is the dream of other international banks yet for some reason, they seem impervious to competition. Could it be that the game is rigged? Could they really be protected from competition by the imprimatur of Government? After all, $40 billion of profit generates $12 billion of company tax revenue.
But let’s just have a look at the membership of the boards of the big 4. Let’s just ignore for a moment the cross pollination of senior executives from one bank being on the board of a different bank. Who are the standout directors on 4 of the big 5:
- Jane Halton AO, PSM – fomer Secretary of Commonwealth Department of Finance
- Rob Whitfield – former Secretary of NSW Treasury
- Ken Henry AC, Chairman and former Secretary of Commonweath Treasury
- Gary Banks – former Chairman of the Productivity Commission
- Glenn Stevens AC – recently “retired” Governmenor of the Reserve Bank and Australia
But hang on. Let’s not forget some of the previous folk:
- David Morgan was CEO and Managing Director of Westpac. He was also Deputy Secretary Commonwealth Treasury
- Ted Evans was Chairman of Westpac. He was also Secretary of Commonwealth Treasury.
- Ian Macfarlane was a Director of ANZ. He was also Governor of the Reserve Bank of Australia.
So really. What do people expect will happen to the Australian banks?
Follow I Am Spartacus on Twitter at @Ey_am_Spartacus