Friday, March 5, 2010

Big bank 'monopoly' nets $20 billion from customers

The big four banks are making $20 billion additional profit by gouging customers and are so powerful they are 'immune to competition', according to research.

Australia's big four banks – Westpac, National Australia Bank, Commonwealth Bank of Australia and ANZ – earned around $35 billion in underlying profits last year and now control around 90 percent of the lending market.

Around $20 billion of that profit is being booked as a result of the banks' monopoly of the payments system, an Australia Institute study says.

"With a 90 percent share of the lending market banks are immune from competition which means there’s little to stop them from passing on or increasing costs for customers and growing even more profitable over time," said David Richardson, a senior researcher at the Australia Institute.

Comment: why we need a people's bank now

Mr Richardson added that the speed with which the banks raise interest rates following changes to official interest rates by the Reserve Bank shows the banks' keenness to grab extra profits.

"The banks are using the RBA's decisions on official rates as a pretext for profit-taking," said Mr Richardson.

"While the banks suggest that their borrowing costs increase directly in line with official interest rates this is not entirely accurate. Banks rely on funds from a range of sources, including the zero interest savings and other accounts of their customers, so to suggest that their costs increase directly with increases in official interest rates is clearly an exaggeration."

He added that the banks are immune to competition which means there is nothing to stop them increasing costs for customers.

David Bell, Australian Bankers’ Association CEO, said the Australia Institute report ignores the contribution banks make to the community.

"The Australia Institute report released is a disappointing interpretation of the important role that banks in Australia played during the global financial crisis," he said.

"For an organisation that seeks 'balance' as part of it philosophy, it has produced a polemic that does nothing more than denigrate banks’ contribution to the Australian economy and community."

Mr Richardson said the government should step in and impose additional regulation on the banks.

"It is becoming increasingly clear that simply relying on market forces to reign in the profitability of the banks is doomed to fail," Mr Richardson said.

"Their market share has risen steadily since they were deregulated. It is time for governments to control access to the payments system including caps on the fees banks charge their customers. If necessary it may be useful to introduce a bank rent tax modelled on the resource rent tax."

money.ninemsn.com 5 Mar 2010


Dad slams inaction after hospital death

A man whose daughter died because of bungled hospital treatment says the NSW health system has "the mice in charge of the cheese" when it comes to handling complaints.

Warren Anderson's daughter Vanessa was taken to hospital after she was hit by a golf ball, but the 16-year-old died after a doctor misread her chart.

It took an "astronomical" amount of correspondence before any action was taken on his complaints, he said.

"It wasn't until after relentless correspondence that we got something happening," Mr Anderson told an inquiry into the Health Care Complaints Commission (HCCC) in Sydney on Thursday.

"I am up here saying a speech - I should be saying a speech at (Vanessa's) 21st this year, that's where I should be - but I'm not, I am here trying to get to a point where Vanessa's death is going to bring some change."

In 2005 Vanessa, 16, was taken to Royal North Shore hospital after being hit on the head by a golf ball.

Two days later she was dead.

An inquiry found that the teenager died of respiratory failure as a result of "systemic failures" and the inappropriate administration of pain relief.

Mr Anderson questioned the independence of the HCCC, which is run by the NSW government.

"(People say) why go to the HCCC? They are just reporting to the government," he said.

"It's the mice in charge of the cheese, and that is what loses the credibility of the HCCC to the general public."

He also said that the HCCC didn't make the most of its powers.

4 Mar 2010

This is unfortunately a classic example of the politics of the health care system for the masses.

Where a life of the general public is taken and EVERYONE involved denounces responsibility, and NO ONE can be sued.




Wednesday, March 3, 2010

Aussies deported after boy steals 53 cents




An Australian woman and her two sons will be deported from the US after one of the boys punched a classmate and stole 53 cents.

Tracey Washington and her two boys, aged 13 and 5, have been declared illegal immigrants after she missed a deadline to apply for a green card last May, the Daily Telegraph reports.

Mrs Washington, who moved to San Francisco six years ago to marry husband Charles, claims that immigration authorities had told her a different deadline.

The trio's immigration status was only flagged when the 13-year-old was involved in a schoolyard incident in January where he punched another boy and stole the small sum of money.

He was arrested after the other boy’s family contacted police.

Unfortunately for the Washingtons, San Francisco recently implemented a hardline policy forcing juvenile arrests to be reported to federal immigration authorities.

The uncompromising policy was introduced after the city was accused of being a haven for illegal immigrants.

Mr Washington must stay in the US because of a shared custody agreement with his ex-wife for care of their 12-year-old daughter.

The deportations are set to take place on Friday after the Australian government declined to get involved.