Australia to hold new inquiry into 'Big Four' banks

| Sun May 7, 2017 | 11:14pm EDT FILE PHOTO - The logo of the Commonwealth Bank of Australia (CBA) is displayed outside a branch in Sydney, Australia, March 21, 2016. REUTERS/David Gray/File Photo By Swati Pandey | SYDNEY Australia will hold an inquiry into competition in the country's financial system, following a series of scandals in the banking sector and public allegations against the "Big Four" banks of abuse of market power. The latest inquiry is part of a number of government measures since last year aimed at alleviating public concerns about the power of the big banks, after revelations of misconduct in the industry. Australia's four major lenders - Commonwealth Bank of Australia (CBA.AX), Westpac Banking Corp (WBC.AX), ANZ Banking Group (ANZ.AX) and National Australia Bank (NAB.AX) - have come under fire recently following several scams involving misleading financial advice, insurance fraud and interest-rate rigging, as well as for refusing to pass on official interest rate cuts in full. The four together control 80 percent of Australia's lending market and have posted record profits for years. Westpac, NAB and ANZ all reported a rise in half-yearly cash profits this month, taking their total to about A$8.5 billion. CBA will report limited third-quarter figures on Tuesday. "The high concentration and degree of vertical integration in some parts of the Australian financial system has the potential to limit the benefits of competition...and should be proactively monitored over time," Treasurer Scott Morrison said in a statement on Monday. "The Government is committed to ensuring that Australia's financial system is competitive and innovative. That is why I have tasked the Productivity Commission to hold an inquiry into competition in Australia's financial system." The inquiry will consider the degree of concentration in key segments of the financial system, examine barriers to innovation in the system and look into competition in personal deposits and mortgages for households and small businesses. The Productivity Commission will commence the inquiry on July 1, and the final report is likely to be presented to the government within 12 months of that, Morrison said. Also In Business News Euro hits 6-month high, Asian shares firm after French election Wall Street set to rise after Macron wins in France Last year, the government used its one-seat majority in parliament to avoid a sweeping Royal Commission into banks but later announced a limited inquiry targeting mistreatment of small business customers. The government also beefed up the corporate watchdog's powers, ordered bank chiefs to make annual appearances before parliament's economics committee and promised a tribunal to examine citizen complaints. Australian banks have themselves promised unprecedented reforms to protect consumers and boost transparency, including reviewing sales commissions, supporting whistle-blowers and black-listing individuals for poor conduct. (Reporting by Swati Pandey; Editing by Sam Holmes) ============= Royal Adelaide Hospital problems between builder and consortium: Snelling The new Royal Adelaide Hospital will open on September 5, 2017. The Australian 1:08PM May 8, 2017 After repeated delays, the $2.3 billion new Royal Adelaide Hospital will open on September 5, 17 months late and $640 million over budget, as last minute legal action brews between the builder and the project consortium. Health Minister Jack Snelling said the hospital, the world’s third most expensive building, was the biggest thing to happen in the State’s health system in 200 years. But he distanced the government from builder Hansen Yuncken Leighton Contractors (HYLC)’s imminent legal threat, saying any claims were between the builder and project consortium SA Health Partnership. “Those issues are entirely between the builder and the consortium, they don’t involve the government at all,’’ he said. “They revolve purely around money issues and they won’t affect commercial acceptance or our ability to move into the hospital.’’ The Australian reported today HYLC could walk off the job one month shy of commercial acceptance and sue project consortium SA Health Partnership, a move insiders believe could place the Weatherill Labor government in the firing line for a compensation claim potentially worth several hundred million dollars. read more Hospital builders set to walk Health minister Jack Snelling. Mr Snelling said it would be taxpayers who would be compensated for building defects and disagreed with HYLC’s claim that all safety and defect concerns had been resolved. The government would take over the $1m-a-day service payment upon commercial acceptance, on schedule to be signed off mid next month. “The contract was extremely robust which protected the rights of taxpayers and they have not been, in any way, exposed to delays,’’ he said. “This hospital is worth every single dollar that we’ve paid for it.” He said the government would now go through an arbitration process, to work out compensation to the state for defects and work not met in the contract. “None of those things affect the safe operation of the hospital,’’ he said. Defects at the heart of a legal stoush in December between the builder and the government included leaking cooling pipes, incorrect room sizes, sewer pipes in a data equipemtn room and a lower-than-required ceiling height for loading docks. From mid July, patient numbers will be halved at the current RAH site before 300 patients are moved from the current hospital, 1.6km east of the new site in Adelaide CBD, over three days from September 4. Some outpatients would be able access services, such as radiation therapy, from mid August. Today, Mr Snelling said the opening date could be pushed back later in September if patient numbers were high. It comes as reports that flu cases in South Australia have been running at their highest rate in five years, raising new fears about the timing of the move to shift into the new hospital in winter. Australian Nursing and Midwifery Federation SA’s secretary Elizabeth Dabars there was still a lot of work to be done to prepare for the move. “Testing and remedial work continues to be undertaken and until those processes are complete, and nursing staff are able to visit and review their practice in the new environment, we may still face further obstacles,” she said. ===================