As the election fight gears up, with less than three months to go until the polls open, Labor has vowed to expand the existing compensation scheme available to victims who have been ripped off by banks and financial service firms, in the wake of the recently concluded royal commission.
Opposition leader Bill Shorten confirmed the announcement on Friday, revealing that Labor will pay up to four times the amount of compensation on offer by the government to individuals.
While the Coalition has capped the amount of compensation that can be paid to an individual at $500,000, Labor is now vowing to raise the cap to $2 million if the party is elected into government. The new scheme will also raise the cap for small business to $2 million, which is double the maximum sum offered by the LNP.
“If people have been ripped off they should be compensated,” Shorten told ABC Radio National. “If you’ve lost your house, that upsets your whole livelihood, if you’ve lost your business, if you’ve lost your farm, there’s consequential losses, both economic and non-economic.
“Why should someone who’s been ripped off by the banks have their compensation capped by a bank who doesn’t want to pay more for the damage they’ve done?”
Labor has also pledged payments under the new scheme of compensation up to $1 million for “non-financial losses” which Shorten said would include the likes of”stress and illness”, adding that Australian politicians have “underestimated the problem” which he said is much deeper than anyone realised.
The scheme, which Shorten said would be funded through a levy paid by the financial services sector, will also allow people to reopen their cases and have cases heard dating back to January 2008, with a two-year timeframe for the submission of relevant material.
“I don’t work for the banks, I work for the people,” Shorten added. “The reality is, no one I’ve met that’s been through mistreatment at the hands of the banks thinks the compensation is adequate, they would just rather it never happened.
“So any compensation is still second best to the wrong not occurring, but if we’re going to compensate people let’s do it properly.”
I’m glad the banks have apologised for the conduct that led to the #bankingrc, but sometimes words aren’t enough.
Labor will empower victims, and create an unprecedented compensation scheme so financial institutions can correct the wrongs of the past. pic.twitter.com/fEGZVLa3k1
— Clare O'Neil MP (@ClareONeilMP) February 21, 2019
Shorten went on to slam the banks, claiming that many senior executives have got off “scot-free”, following the scathing revelations that emerged during the Banking Royal Commission, which delivered an extensive list of 76 recommendations earlier this month.