25 Feb 2025

INTRODUCTION

Robert Barwick (RB) Welcome to Citizens Insight, the Citizens Party’s interview series on matters of national and international importance. And for this election year, on the Citizens Party’s leading candidates for the 2025 election. My guest today, I am very honoured to say, is the one and only Associate Professor Andy Schmulow. Welcome, Andy.

Andy Schmulow (AS) Thank you very much for having me. I’m honoured to be here and I’m honoured to speak to the members.

RB I’ve been dying to have this discussion since even before I met you, but definitely when I first met you. After two hours in a cafe with you, and lots of laughing and swearing and cursing at all the right things, I thought we’ve got to get this guy on the show. Andy, you’re the Citizens Party Senate candidate for New South Wales.

AS Honoured to be that—yes.

RB Yes, and we’re definitely honoured to have you. I want to say something before we start. In my view, viewers, this man is the champion of the people. What I mean by that is not just the someone, not just the person who will go in to bat for people against the rigged system, but someone who knows how to land blows against that system, and you’ll see that in the interview today. You know bullies punch down, heroes punch up! Andy doesn’t punch up—he explodes up! And we need what Andy Schmulow can bring in the Australian Senate and I am absolutely adamant about that, so with that introduction Andy, I hope you don’t find that too embarrassing.

AS I have no capacity for embarrassment.

RB You have the right level of modesty to take on the banks in my opinion. We need that—thank you. What is it about politics that made you want to be a senator?

AS It’s not ambition. I’ve got a good job. I have a good salary. I have a pretty cushy job. I work when I want to. I’ve got a great new Research Grant. I’m set, so it’s not ambition that makes me want to do this. It’s a combination of being pissed off, and cynical. And you hear people saying all the time, “Why doesn’t somebody do something” and I said to myself, “Dude, you’re somebody. Why don’t you do something?” And you know, you’ll be able to hear from my accent, I immigrated to this country, and every single day I am grateful to have the opportunity to live in this country. I’m incredibly grateful to have been allowed to come and live in this country. And I see bad things happening in this country; I see this country deteriorating. I see this country—I see a lot of very bad things happening, and somebody has got to stand up and do something about it. And I can tell you, the bad things that are happening to this country and the things that are going to affect people’s lives, are not other people’s pronouns. And they’re not whatever flag the Prime Minister stands in front of—whether it’s an Australian flag or an Aboriginal flag is going to make no difference to your life. What is going to make a difference to your life, is the fact that we have two supermarkets which are gouging you every time you go and buy food—and try living without food!

We’ve got four banks that are responsible, that are the reason why we’ve had no real wage increases in the last 15 years—not my opinion, that’s the Productivity Commission’s views. These entrenched interests which are buying off our political parties, nobody stands up to them man! And in the times that I’ve had the opportunity to go before the Senate, I’m finding it’s not really that difficult. Like, all you have to do is take their arguments and turn them into a stick and beat them. So you know that’s why I really want to do this.

RB You’re a Professor of Law at the University of Wollongong, and you’re an expert in financial regulation and so that’s … when you look at the world, those are the things that jump out at you. But in our view, this is what we in the Citizens Party definitely share with you: those are the things that are screwing up the country; the failings in those areas which affect everybody, and not enough attention is paid to them. And one of the things that I felt a kindred spirit in you, when I first met you, is: I too have had a lot of experience in Parliament. And you get this dynamic with the two major parties where you can have decent conversations with individuals there (potentially), some of the better ones. But as machines, they’re locked into serving vested interests rather than the people who elected them. Right?

AS 100 per cent!

RB And nothing changes. And that’s why we want to take the fight up to Parliament, and that’s why we’re grateful you’re going to be our candidate. What is it about the Citizens Party that attracted you?

AS Well, first of all, it’s not a major [party], and a vote for the majors is a wasted vote. Officially we have two major parties, the Liberal Party and the Labor Party. I call them the Liberal Party and the Diet Liberal Party—so, fewer calories, same great Liberal taste! There’s no difference between these parties anymore. They follow the same policies; they follow the same strategies. And there’s this very curious situation where whoever is in government refuses to fix the problem and whoever is in opposition wails about how the problem needs to be fixed, and then the roles switch and the people who’ve been wailing about the problem refuse to fix it, and the people who are in opposition wail. I’ll give you an example: the bank branch closure inquiry. It was a great inquiry. I welcomed it. I think the recommendations it handed down were fantastic—I’m a little bit biased because it adopted a lot of my recommendations—but you know what? The people who ran that inquiry and who brought down all of these fantastic recommendations, they were in government for 10 years! What were you guys doing while you were in government?

RB Including those Nationals and it’s their natural constituents out there in Regional Australia losing their branches, and they did nothing!

AS I cannot understand how people in Regional Australia are still being duped by the Nationals. No party has served their constituency worse than the Nationals. And it’s all very well for Matt Canavan to turn around in 2024 and go “Bah, the banks!” But hang on, we had an inquiry into bank branch closures in 2004—21 years ago. This is not a new problem. You guys had 10 years in office—what did you do about it? All you did was allow banks, and facilitate banks, and encourage banks, to close branches, and then you turn around and go “this is a problem”. No shit, Sherlock!

RB In the Citizens Party we—so I’m part of the research staff, as you know, and have been for a long time. I’m the Research Director as well as your fellow lead Senate candidate, but for Victoria. We’ve followed you for a long time because we started noticing you in the leadup to the banking Royal Commission. You know, quotes from Andy Schmulow in the press that were laser-like and cut through all the BS that we were seeing, that the banks were coming up with to try to weasel out of accountability. And it showed us that you’ve been in hand-to-hand combat—virtual combat—with these banks for quite a long time. How did you get into that battle of going after the banks?

BANKING REGULATION

AS So, I finished my Ph.D. in Banking Regulation in 2013. It was at that stage, and I think is still, the only law Ph.D. in Australia on prudential regulation. Soon after I finished my Ph.D., I was asked to join a research project at Melbourne University, on the way in which our financial system is structured—it’s called the Twin Peaks model, and I was quietly working away on that. In 2014 there was a Senate inquiry into misconduct in the banking industry—that was the first time there was a call for a Royal Commission—and I looked at the evidence and I went: “What? They’re doing what? They’re forging people’s signatures? They’re stealing money out of people’s accounts? They’re charging dead people for financial advice? This cannot be happening in Australia. It’s impossible—I must be imagining this!”

And the more evidence that came out, the more I looked at this and went: “What? Hang on a minute! They used to say Australia is like Sweden with better weather. No, no, no, no, no, this place is like Russia with better weather!”

And nobody holds these guys to account, and ASIC does absolutely bugger-all about it. And this is the single most important industry in the country. No business in this country—it doesn’t matter what business you’re in—can operate without access to the banking industry. So they’re the lynchpin between every single other part of the economy, and they’re the lynchpin between every business and its profitability and its ability to pay its workers.

Our banks are now the most profitable banking industry by return on equity in the world. Where is that money coming from? It’s coming from every business that has a bank account, that has a loan. And if we had more competition in the banking industry, they would be less profitable which would mean there would be more money in people’s businesses, more money in people’s pockets. We wouldn’t have had no real wage increases in the last 15 years. We are being sucked dry by these guys. And every time they engage in misconduct, the government kind of looks around going, “Oh, oh, oh, this is a very difficult problem.”

Six years after the Hayne Royal Commission—six years!—ANZ is still stealing from the dead and the woman in charge of the retail division, Maile Carnegie, instead of being sacked, instead of being charged with conspiracy to commit fraud, she got a $900,000 bonus.

The rule in this country is: If you’re part of the Big Four corporate elite—Big Four banks; Big Four accounting firms (PricewaterhouseCoopers, KPMG, Ernst & Young, Deloitte); if you’re part of big mining, if you’re an owner of a big mining industry company; a “pokies” vendor; or Coles and Woolworths—you are untouchable!

And I’m sorry, as a Law Professor—Associate Professor—one of the most fundamental principles for me is equality before the law. And so you know, your members who live in Sydney and Melbourne will understand what I’m saying, if I say to them: if your motor car is in a parking bay for two minutes longer than it should be, and in Melbourne they time you from the time you drive in, not the time you put the money in the meter—the time starts before you’ve put the money in the meter! If you’re two minutes longer, you’ll get a fine. Good luck trying not to pay it. But, if you financially gouge a million customers and you break the law on an industrial scale, what’s the worst thing that’ll happen to you? You’ll get a slightly smaller bonus. Hang on man! Is this what we’re doing to this country? Why isn’t there anybody in Parliament who has the ability to stand up to Anna Bligh and the Australian Banking Association and put them back in their box? And when I’ve listened to the kind of testimony that they give, I think to myself: “If I was in that position, seriously, it would be like having a battle of with an unarmed person. They’re just not that smart, man!”

RB No, but they’ve got the politicians bamboozled. And we’ve already talked about how both sides of parliament are too much in their debt. But we’ve also discussed that there’s another factor that we’re convinced of, which is it’s not just the elected politicians. There’s a bureaucracy, especially the Treasury, which is the agency that should have the continuity to be on top of all these things and drive the change needed, but that is clearly part of the problem.

AS One hundred per cent! I’ve come to the view that Treasury is the unsung villain of the piece. You know, I’m not a conspiracy cooker, and I really don’t like the expression, “Deep State” because it’s conspiracy-cooker nonsense, but if there was a deep state, that deep state would be Federal Treasury. They are manipulative. They make sure that their appointments are always in charge of APRA and ASIC. They make sure that nothing gets done by APRA or ASIC that will challenge the banks because—and this is not my view—this was the testimony of Professor Allan Fels, who was the foundation chair of the ACCC. He gave testimony to the ASIC Inquiry and he said, on the record, that ASIC was given enforcement [responsibility] of the banking industry. It was taken away from the ACCC. That decision was made by people at Treasury who, straight after they made that decision, then went and took up cushy jobs at the banks. There’s a word for that: corruption!

RB Except we’re one country that doesn’t call it that. And that is just one example of the revolving door that we identified years ago between Treasury and the banks that has kept them way too powerful.

Now, you’re originally from South Africa and you told me something about South Africa when we first met which I just found completely fascinating, and that’s about the power balance between banks and Parliament. Because of its unique demographics, South Africa’s banks behave much better than Australia’s, and I believe this is an insight into how banks should be treated here. Just describe that for the audience.

AS So, South Africa had a very heartbreaking history of apartheid in which black South Africans were dispossessed, disenfranchised, disadvantaged, brutalised. And there’s a lot of sensitivity around how people are treated in South Africa. On top of that, the South African population—90 per cent of the population is black, 10 per cent is white. But the 10 per cent who are white own 90 per cent of the financial industry, and the 90 per cent who are black own 10 per cent of the financial industry. Which means that banks know (and I know they know this, because I’ve been told this in meetings I’ve had with CEOs of three of their big six banks) that if they commit misconduct, then rule of thumb, 90 per cent of the victims will be black South Africans. And that will be the quickest, shortest, most hassle-free, most efficient route to being nationalised. So, they are shitting themselves!

RB Because Parliament is dominated by black politicians?

AS By a black liberation movement political party. And there’d probably be a quarter of the ruling party’s caucus who would openly advocate to nationalise the banks. So these guys know if you engage in misconduct, we’re going to take your toys away, and they are so shit-scared about that, that their single greatest priority is “don’t commit misconduct”.

I had a meeting with the CEO of one of the big five banks and he said to me: “My greatest fear is that I get to work one morning and 60 Minutes is in the foyer doing a story.” He didn’t say, my greatest fear is a sudden rise in doubtful debts, or an exogenous economic shock or interest rates that go up—“my greatest fear is that 60 minutes is in the foyer doing a story”, because he knows if that happens, by the close of business that day, he’ll be out of a job.

And so, when I deal with banks in South Africa, and I advise on conduct and on how to comply with conduct regulations, when I tell them about the things that happen in Australia—because I’m a lecturer, and because I pay attention to what my audience is doing, and I pay attention to whether students are listening, and I watch their body language. When I’m sitting around a board table and I tell people in South Africa what has happened in Australia, and I see them kind of glancing at each other like this:

Is this guy a nutter? Is he making this stuff up? Like, this isn’t true is it? So, I take out my phone and I show them stories in the newspaper from Australia, and they look at and they go: They were doing what? They were stealing money from dead people’s accounts? But why aren’t they in jail? Coz it’s Australia mate! Nobody goes to jail here!

RB So fear is the great motivator if you want good outcome from banks!

AS Absolutely! And in law, we have a fancy word for that. The word is “deterrence”. But it’s the same thing: fear of the consequences of breaking the law. What fear is there of the consequences of breaking the law in this country? There are no consequences.

RB And you could say Andy that we’re in an era—I think it actually started with the Global Financial Crisis, when no one went to jail, and people have just become increasingly cynical ever since.

AS But, be an indigenous kid and steal a packet of biscuits, yeah oh that’ll undermine Western Civilisation! We got to get that little bastard in jail and put a hood over his head, put a hood over his head and beat him till he cries blood. But a banker who steals hundreds of millions of dollars, he retires to a private island in Noumea.

ROYAL COMMISSION – BANKING AND FINANCIAL SERVICES

RB Well then I suspect I know the response to this question, but I’m going to ask it anyway. What did you think of the Banking Royal Commission? Did it work?

AS No. It went out with a whimper. The Interim Report was strong. We saw Commissioner Hayne—inasmuch as a high court judge would ever, in public, “lose his shit”—losing his shit, at the Royal Commission. And he had three or four tells. The first was, he’d roll his eyes. The second was, he’d cross his arms. And the third was, he’d do this [leans back in his chair]. And if you got the trifecta—eyes rolling, arms folded, leaning back in his chair—it was his way of saying “you are a pathological liar and an idiot”. And he did that so many times, with so many people; and I thought that what would come out of that, would be some recommendations that would really take a stick to our banking industry.

While the Royal Commission was going on, the Productivity Commission brought out a report in which they said that our four banks are a cozy four-bank oligopoly, with inadequate competition. What Commissioner Hayne should have recommended was the Big Four Banks be broken up—number 1. Number 2, he kind of passed the parcel on closing down and restarting ASIC. And what he said in his recommendations, at about page 200 or page 275 or thereabouts (the page numbers differ whether you’re using the word document or the PDF). But he said in his final report: “I’ve thought about the question of shutting down ASIC. I think, let’s give them another couple of years and if their performance doesn’t improve let’s revisit.” A couple of years? That’s two years.

It’s been six years! We’ve had another Senate Inquiry—a senate inquiry that has completely excoriated them. A senate inquiry that is on top of a 2014 inquiry that said they weren’t doing their job; a 2014 Financial System Inquiry that said they weren’t doing their job; a 2015 Treasury Capability Review that said they weren’t doing their job; a 2018 Royal Commission that said they weren’t doing their job; a 2024 Senate Inquiry that they said they weren’t doing their job. You know what, after you’ve had five inquiries saying they’re not doing their job, maybe the answer is: they’re not doing their job!

And if you’ve had five inquiries going back now 11 years, and they still haven’t got their shit together, shut them down man! Shut them down. Start again. We don’t have the time and the patience to keep throwing Australian citizens under a bus while ANZ, in December of last year, six years after the Hayne Commission, is still thieving from people’s corpses. What is it with this place man? Like if you’re going to steal from someone can you at least have the decency not to steal from a corpse? What kind of a dog are you when you steal from dead people? What does Maile Carnegie do when she goes home and she speaks to her kids? “What did you do at work today, mummy?” “Well, I ran a division that steals from dead people.”

I mean, it’s disgusting.

RB And to think it was such a scandal when that came out of the Royal Commission, and it’s as you said, six years later.

AS They’ve done nothing. They keep doing it.

RB Yep. Our party’s involvement in that Royal Commission was to push—we spent the whole year pushing so hard to break the Big Four banks up. That was our contribution. We even got a bill introduced in Parliament in the middle of it to break the banks up, right? And of course it’s interesting you said that the interim report was quite strong, because there’s always this question what happened between that report and the final report? And Hayne’s body language when he handed that report over to Josh Frydenberg, it—do you have a suspicion?

AS Oof. I don’t think that Hayne … I don’t think Hayne was pressured. Hayne is immune. As far as I’m concerned—this is my opinion—Kenneth Hayne, his integrity is inviolable. I don’t I think that that creepy little man, Josh Frydenberg, or his even creepier boss, Scott Morrison, would have had any joy putting pressure on Kenneth Hayne. But I think what happens with judges, they have a tendency … how can I explain this? They have a tendency to follow the black-letter law, and sometimes they don’t see the wood for the trees. So, what I mean by that is, Hayne would have looked at ASIC and he would have said, “Well, under the legislation ASIC is empowered to do the following things, so I don’t really understand why they’re not doing them. Let’s just remind them, “Under the legislation you’re empowered to do the following. Go and do it!”

You need someone who’s maybe not steeped in that mindset, who’ll go: “But if they’ve got the power and they’re not doing these things, then it’s not a legal problem. It’s a cultural problem at ASIC.” And you can’t solve a cultural problem by pointing them to the law. You solve a cultural problem by taking the leaders and sacking them. And then rehiring them, so you can sack them again! That’s how you send the message, “What you are doing with the legal powers you have is not enough.”

And I think that Hayne—and I saw this with the Law Reform Commission as well. The Law Reform Commission ran an inquiry into how to reform the financial services laws. And I went before the Law Reform Commission, and I said to them that the financial services laws, chapter 7—I didn’t quite use this terminology—but the technical term for chapter 7 of the Corporations Act, is it’s a glittering clusterfuck. It is unfixable. Take it, throw it in the bin, start again. Here’s a template from South Africa. It’s a piece of legislation written in plain English that anybody can understand—a year 10 child could understand it—and it’s less than 100 pages long. And they were like—they looked at it and they went, “We like that, but we’re not sure whether that’s within our mandate.” And I wanted to say to the person in charge, “Mate, you’re a judge—the mandate is whatever you say the mandate is. So you just tell them, ‘This is my mandate; and this is my….” But oh, no; you know, “I don’t want to overstep the mark.”

So there’s this kind of cautiousness that you get from the Judiciary. And I’m not criticising the Judiciary, but there’s a cautiousness that’s built into them from being schooled in balancing evidence, balancing the rights of the accused, all of that stuff. Which is why you’ve got to take these policy decisions away from the Judiciary; you’ve got to put it in Parliament, you’ve got to find parliamentarians who are not bought off by the banking industry, you’ve got to issue them with big sticks, and you’ve got to start lashing these guys.

RB And in Hayne’s defence, when he handed over that report to Frydenberg and refused to shake his hand, he probably knew that’s what Parliament didn’t have.

AS Yep. And he knew that Frydenberg would try and twist it. And he knew that as a Royal Commissioner, he was supposed to hand his report to the Governor-General. Frydenberg tried to turn it into a photo op. “See, we’re solving the problems! I’m Josh Frydenberg. I’m getting the report. Look at me!” And so he (Hayne) felt so compromised, he felt so embarrassed by this grubby political move that he handed over the report and did this—refused to shake his hand. Josh Frydenberg must have a very thick skin. Because if a High Court judge refused to shake my hand, I would dig a hole, crawl into it and die.

RB Well, bankers have some kind of operation that removes their shame nerve, and maybe that accounts for it. Now, on a related subject, in terms of what’s possible in Parliament: you’ve been a major driving force—and you can’t exaggerate this, your role in the in recent Senate inquiries. Your contribution has shaped the outcome of those inquiries. So I want to go through them briefly and just get your comments on them, just so that people can see the body of your work. But let’s start with the one that most proves what we’ve just been talking about, which is the Financial Accountability Regime.

AS: Yep. So just to just to fill your viewers in—it’s a little bit technical—let me just go through the technicalities of it very briefly. One of the things that the Royal Commission said was, there’s no point in fining the company. You fine the company, who pays the fine? The shareholders. But the shareholders are not the ones who are going, “yeah let’s steal from the dead, because then there’s more profit and if we make more profit I get a bigger bonus.” Right? That’s how this works. It’s all about the management’s bonus. So Hayne said, we’ve got to have legislation that makes individuals accountable. Not accountable for everything; if you’re a director of Westpac Bank, you can’t be across every single one of the 15 million transactions that that bank engages in every day. No. But if somebody comes to you, as a director of AMP, and says to you, “Sir/Madam, we have evidence that we’re stealing money from dead people”; and you go, “Don’t worry about it! You worry too much!” Under a situation like that, we’ve got to be able to say to that individual, “you’re going to pay. You are going to pay.”

RB To highly paid individuals, by the way.

AS People are earning tens of millions. The guy who took over from Catherine Brenner—who was the CEO of AMP, and when she was lashed for the way AMP was operating, one of the things she said was, she complained, she said “I’m under the most—I’m being treated so terribly badly, I’ve got reporters hanging around my house while I’m trying to take my children to school.” And somebody went, “Your kids go to a private school, and it’s private school holidays. You aren’t taking your kids to school.”

RB Sob story.

AS The guy who took over, Franco de Ferrari—he got paid $27 million to take the job. This is obscene. $27 million!

RB He hadn’t done anything yet—he hadn’t earned anything yet.

AS: He hadn’t done anything yet, and while he was there he didn’t do anything! So if you go to somebody who’s a director at AMP or as the CEO, the current CEO of Commonwealth Bank Matthew Comyn; or as you very eloquently put it, Cry-baby Comyn. Cry-baby Comyn gave testimony to the Royal Commission in which he said he went to the then CEO, Ian Narev, and he said “Mr Narev, I have evidence that we’re breaking the law. We’ve sold junk insurance (which is against the law) to 250,000 credit card customers.” And according to Comyn’s testimony, then-CEO Ian Narev turned around to him and said, “Temper your sense of injustice.” Which is a fancy way of saying, “You need to look the other way, mate—”

RB Conscience is not allowed.

AS “—because the money we’re earning from selling junk insurance, that goes to our headline earnings, which is of critical importance because the bigger the headline earnings, the bigger my bonus.” Right? And everybody was so shocked Ian Narev would say something—like, “Oh my God”. But what people didn’t ask at the time was when Ian Narev said to Matthew Comyn, “You need to look the other way”, the question I asked is, what did Matthew Comyn do next? He looked the other way.

RB Yes.

$1 MILLION FINES—FIXED, THEN UNFIXED

AS So, we have this legislation that gets put forward: We’ve got to be able to hold people accountable. So I went through the legislation. It’s incredibly and unnecessarily complex. Written by Treasury with unnecessary complexity, so that it becomes a sleight-of-hand trick. Right? The hand is faster than the eye, right? So you don’t know which cup it’s under because the hand moves faster than the eye.

And there’s all this competing complexity in the legislation. And I went over it with some colleagues, and eventually we unpacked it. And the way it works is this: there’s a section in the legislation that says if you’re told about misconduct and you look the other way, you’ll be held personally accountable. Then you read to the end of the legislation, where it says hey, you know that previous section where it said we’ll hold you accountable? You can’t use that section against an individual. I kid you not.

RB All the financial victims watching this are having PTSD right now. But anyway, keep going.

AS So I went before the Senate; Senator Dr Jess Walsh from Victoria. And I explained to her in forensic detail—and your viewers can look this up if they want to: Financial Accountability Regime Act (Commonwealth). Go to section 21, have a look what section 21 says; then go to section 83 subsection 3, Note 2, which tells you only section 81 can be used against an individual; go and look at section 81, section 81 says the only sections that can be used against an individual are civil penalty provisions. Then you have to go to another piece of legislation, the Regulatory Powers Act section 79 subsection 2: what’s the civil penalty provision? A provision that says at the bottom, “this is a civil penalty provision”. If it doesn’t say those words, it ain’t a civil penalty provision. And according to section 81, if it’s not a civil penalty provision you can’t use it against an individual.

So I go before Parliament, I explain all of this to Senator Walsh—she completely ignores me.

Senator Nick McKim from the Greens was absolutely ropable about this. So he went to the Government and he said we won’t support the passage of any of these bills, unless you change section 21 so that it can be used against individuals. So they changed it. They changed section 21; they fixed section 21. They made it a $1.1 million fine for individuals.

Rachel Clun—you can check this out, Rachel Clun writing in the Sydney Morning Herald on the 23rd of November 2022, she wrote an article in which she said $1.1 million fines are back, section 21’s been fixed, we’ll be holding individuals accountable. On the 3rd of December 2022, same journalist, Rachel Clun; same newspaper, Sydney Morning Herald, in an article entitled “Deal or No Deal”, recounted how the fix had been unfixed. The repair to section 21 had been reversed because the Australian Banking Association made one phone call to the Treasurer and said to him: Jimmy boy, little boy—have you forgotten who you work for, little boy? We fund your campaigns. You’re not going to fine our members. Don’t worry about what Schmulow says, that these regimes exist in 12 other countries. Stuff that. This is this Australia mate! And don’t worry about the fact that in the United Kingdom not only can they fine individuals for this kind of conduct, they can put them in jail. That’s not how we’re going to do it in Australia. And the way we’re going to do it in Australia is the way we’re going to tell you how to do it, because we own you.

So they took the provisions out, and it was reported in the press. People who think they live in a democracy, people who think because you vote your voice matters: you think because you vote your vote matters? I’ve got news for you: you don’t live in a democracy. You get to vote as some kind of a light-and-mirror show. But who’s actually running this country? The Australian Banking Association; PWC and KPMG, who have sucked down the majority of $21 billion in consulting fees paid for by the taxpayer; the big mining companies; the pokey companies; and Qantas.

RB And how shameless was the official excuse for why we shouldn’t have this law: because the banks said “We wouldn’t be able to attract the right kind of talent”!

AS Hang on a minute, hang on a minute—that begs a question. When you say, “we can’t attract the right kind of talent”, but the talent you’ve been attracting is a talent that said, in the case of Ian Narev when he was told they were breaking the law, he said “look the other way”. So, how do you know you’re attracting the right talent to begin with? And when you’re earning $10 million a year and you’re facing a $1.1 million fine, trust me: people will still be gouging each other’s eyes out to get to the top of that pile. They’ll have no problem attracting the right talent. They’ve had no problem attracting the right talent in any of the other 12 jurisdictions where they’ve done this. These are the kind of arguments you need to put to the Australian Banking Association. Hammer them.

RB And my own experience of this particular episode, Andy: I was in Parliament House the night that the deal was done and Rachel Clun’s headlines went out, “million dollar fines for bankers”. And our contact in the Australian Greens was meeting with us, super excited—“We got this deal, we finally got something out of the Hayne Royal Commission!” And within 24 hours, undone.

AS Gone.

RB All right, so another recent inquiry that you played a big role in was ASIC. And we covered the ASIC thing exhaustively on our on our general show, we followed it along from the very beginning, we played a role in getting the inquiry started. How did you see that one?

ASIC AND JOE LONGO

AS Let me put this in context. Victims of financial industry fraud are not in a position to take on those financial firms. They just don’t have the resources. And this is one of the places where sometimes I think judges don’t quite get that. If you’re a victim of financial industry fraud you can’t sue Commonwealth Bank.

RB How could you? Of course.

AS Westpac has a bigger litigation budget than ASIC. It has a bigger litigation budget than the Government department set up to regulate them. So as an individual it is absolutely hopeless. Right? So we have to have a regulator that has the skill, the expertise, the resources to look at misconduct in the financial industry. And where it finds misconduct in the financial industry—shock, horror: punish someone.

ASIC has been found not to be doing their job. Two inquiries in 2014; an inquiry in 2015; a Royal Commission in 2018; another inquiry in 2024. The guy who is in charge of ASIC, Joe Longo, used to be the general counsel for Deutsche Bank—the most fined, the most law-breaking, the most recidivist bank in the world. Right? Deutsche Bank is the worst-conducted bank in the world; this guy was General Counsel for the Australian operation. And in 1992—I went and did some research on him—he wrote an article in 1992 in the Securities Law Journal in which he argued, passionately but vacuously, that we should recognise companies as having human rights.

RB That’s right.

AS A company’s not a human being, mate! Right? That’s the fundamental—that’s why they’re called a “juristic person”, not a “natural person”. He was all about: “companies should be regarded as having human rights, and they and their right to be protected from prosecution should be …”. I looked at this and I thought: “So this is why Josh Frydenberg appointed you.”

RB And Josh Frydenberg himself was from Deutsche Bank, remember? So maybe there was a connection there, too.

AS And now he’s gone to Goldman Sachs—the “vampire squid”.

RB The vampire squid, that’s right. So how do you think that inquiry turned out, and what’s your hopes for it?

AS The inquiry made fantastic recommendations, one of which is that ASIC needs to be broken up. The person who started all the trouble, John Adams, he and I and the former leader of the Liberal Party, John Hewson, and a team of eminent academics that I assembled wrote a memo to Stephen Jones, the Assistant Treasurer, on what a new ASIC should look like: what its function should be; what best practices [adopted] from around the world. Never heard a word. And why? Because the Labor Party has obviously got a message from the Banking industry to say, “We don’t want an effective ASIC—an effective ASIC will cause us inconvenience. Can’t cause us inconvenience. We own you, monkey.”

RB And you know what I noticed with all those previous inquiries that touched on ASIC that you referred to? The banks never were the ones making the complaints. It’s always consumers and other entities, never the banks. They’re perfectly happy with ASIC.

AS Absolutely. I mean, there was evidence that came out at the Royal Commission that ASIC would negotiate with banks about what press statements ASIC could release when they found that they (the banks) had been breaking the law. I mean these guys are just arse-kissing, toadying lickspittles.

RB Yep. Oh dear. I should apologise for laughing so much. I’m not—this is serious stuff. I’m just laughing because, one, if you didn’t laugh you’d cry. But on the other hand, on the other hand I laugh at the idea that—the prospect that if we could ever get you into the Senate, you can turn this heat onto those guys. I’m laughing at the way they should be squealing.

AS: I would love to have Anna Bligh in front of me. One of the things Anna Bligh said is, “if we have a Royal Commission, it’ll cost the industry a lot of money, and that [cost] will be passed on to consumers.”

And let me just make two points here. If you’re going to have a Royal Commission and it’s going to cost a lot of money, there are actually potentially two different parties you can pass the costs on to. You can pass them on to consumers; or, you can pass it on to shareholders. Right? The shareholders are the people who made all the money when the banks were breaking the law. And why is there—why don’t they even contemplate passing it on to shareholders? Because there isn’t enough competition. If there was enough competition, and you pass the costs on to consumers, people go to a different bank. But the second thing is, to threaten to pass it on to consumers—I styled that at the time as Anna Bligh’s version of Saddam Hussein’s human shield policy. Taking human shields to terrorise, to terrorise the Australian public about the consequences of a Royal Commission. She should be up on terrorism charges for that.

RB And she keeps doing it. It’s the number one fear campaign the Banking Association puts out there.

PWC SCANDALS

RB Well let’s move off the banks for a few subjects—but not too far. PwC was an enormous scandal, and it’s got lots of layers to it; we won’t be able to cover all of it, probably. But you were right in the heart of that, and you caused some real rage in the boardrooms around Australia so just give us a sense of that one.

AS Yeah, I don’t think I’m going to get a Chrissy card from PwC. PwC was up until recently the biggest audit firm in Australia. Audit is incredibly important. They are the gatekeepers of truth in the economy. And what we found—and not only that, PwC was earning $600 million a year on taxpayer-funded projects—including Robodebt. And when PwC went before the Robodebt Royal Commission, the Robodebt Royal Commissioner said to them, “You knew you were participating in an illegal scheme.” And they charged Robodebt $1 million for an eight-slide PowerPoint presentation. That’s $125,000 per slide. What is on the slides to make them worth $125,000? The GPS coordinates for Bigfoot and Elvis? What are you putting on there that’s so critical?

And what a what we found was that PwC had set up structures to help multinationals evade tax. This became such a problem, and it’s become such a political issue, that the Howard [sic] Government, when Joe Hockey was Treasurer, decided to do something about this. So PwC, having created that problem, went to the government and said: You’ve got a problem with multinationals evading tax. We’ll show you how to fix it, but you’ve got to pay us.

RB You mean the Abbott Government when Hockey was Treasurer?

AS Abbott and Hockey, yes. “We created the problem; we’ll show you how to fix the problem we created, but you’ve got to pay us.” Right? Every one of us who sits on the Board of Taxation, you’ve got to pay us $140,000 a year for 10 meetings a year. (That’s more than most people earn in a year, for 10 meetings. Right?) And you’ve got to establish these boards for us to sit on, which you’ve got to pay for—you, the taxpayer. And the boards have got to have a direct line to the Treasurer so that anything we think is urgent, we can get changed quickly; and actually, “anything we think is urgent” is anything that might affect our tax-evading fee-generating clients.

So then they gave the Government this advice, but they built in back doors so that multinationals could continue to evade tax. And as soon as the government accepted the advice, they took the back doors and sold it to the tax-evading multinationals. These guys are apex parasites.

RB And they’d done it a decade earlier in the UK.

AS They’ve been doing it all over the world.

RB Exactly. Exactly.

AS They did it in the Prudential case—they were found to have done it in the Prudential case in the United Kingdom. There was a report by the House of Commons Public Accounts Committee from 2014 that said you [PwC] been facilitating tax evasion all over Europe. They keep secret their tax evasion by misusing attorney-client or solicitor-client privilege. All of this came out in in a Senate inquiry and a parliamentary joint inquiry. And I said some, shall we say, typically calm and polite and courteous and gentle loving things about PwC and the dickheads who run the place, who are traitors. They are traitors to Australia. They’re tax-evading criminals. They’re grifters, they’re shysters, they’re scum. And they got very hot under the collar about it.

PWC TRIES TO GET PROFESSOR SCHMULOW FIRED

AS So they wrote to the University of Wollongong and tried to get me fired. That didn’t go well.

RB Well that’s good.

AS Yep. That didn’t go well for them.

RB Thank goodness for some integrity on that. The fact they even tried though—I mean, this is “the system”, writ large. Aargh! And you could … anyway. I’m letting you do all the ranting today, because you’ve earned the right. But man, this is the stuff that gets me going.

AS I had to take the university … One of the things PwC did, they try to get me fired by filing a confidential complaint. So I had to respond and defend myself, to a complaint that I wasn’t allowed to see. That is a complete abrogation of—

RB That’s like the Middle Ages.

AS Yep. There’s no natural justice there. And when I said to the university, “You can’t expect me to defend myself against a complaint you won’t let me see”, they said “Well, PwC has found information on our website that says we will take confidential complaints to protect a weak party against a strong party.” I went, “A weak party?! This is a $3 billion-a-year operation!”

RB They were the “weak party”?

AS They were the weak party, with $3 billion a year in revenue, 1,000 Partners 6,000 employees and their own law firm—and I’m apparently the bully. And I said to the university, “I want to see the complaint.” And the University said, “We can’t show it you.” So I took the university to court. I took them to the Administrative Affairs Tribunal, and they got a very big law firm to defend them. And the very big law firm asked PwC if they wanted to be a party to the complaint, or [rather] party to the defence. By that stage I’d had this complaint put in so many different newspapers that PwC said “We don’t want to touch this, we don’t want to touch this!” And the big fancy law firm went back to the university and they said to them, “This is not a case you want to fight. You need to give this guy the complaint and do it quickly.” And so I got the complaint, and they were complaining about stuff that Id said, all of which I’d put in quotation marks because I’d taken it from the Australian Financial Review. This is the dirty, sneaky, try and punch down, cowardly, scumbag operators we’re dealing with. And you know, they’ve—I tell you, what they’ve done in Australia, I can promise you: this is not their first rodeo. This is their business model. And the time has come to say to them, as the Minority Report from the Senate Inquiry said, which again—I don’t want to sound like I’m biased—it adopted my recommendations: Cut them down to 100 partners; and if they set foot in a federal government building, have them charged with trespass. No more government work for you, ever. And that’ll learn ’em. Consequences.

PUBLIC SERVANTS

RB Yeah—and while we’re on this subject, we’ll take this opportunity to inform people that this populist policy Peter Dutton has come up with to sack all these public servants, is just outright fraud to get PwC and company back in the building.

AS I can promise you, as—I’ve said this so many times: it costs money to run a country. And if you take money out of the public service, and you take public servants away, people are going to turn around and go, “Why can’t I get my car registered? Why can’t I get a hospital bed? Why can’t I get my passport renewed?” So somebody’s going to have to do the work, but it’s not going to be public servants because you’ve sacked them. So who you going to get to do the work? PwC. And they’re going to charge you 10 times what it would cost to employ someone in the public service.

And I want to tell you something else. I’ve dealt with a lot of public servants: the lower-level people in the public service, the lower to middle management, are the absolute salt of the earth. They are hardworking, they are well qualified, they are honest as the day is long. They want to serve the community. These are not our enemies! Our enemies are PwC, KPMG, Ernest & Young, Deloitte and McKinsey.

SUPERMARKETS

RB Hundred per cent. Let’s move on now. You were also involved in the Coles and Woolies duopoly [parliamentary inquiry], and you brought a point to bear in that inquiry into Coles and Woolies that really stung. Which was their return on capital, and how profitable these this duopoly is. And it caused a lot of defensive excuses by system. But anyway, what do you want to say about that one?

AS Look, I want to give credit. And if I if I ever got the chance, if I was ever lucky enough to serve in the Senate, I’ll work with anyone who will work for the right reasons. I will—I’m not working with lobbyists. I will work with anyone in the Senate. And part of the way you work is to acknowledge good work where it’s done. And I had very fruitful discussions with Senator Nick McKim from the Greens.

RB Yep. He did brilliantly.

AS And I said to him, “Senator McKim, the most important question for you to ask the CEO of Woolworths is: ‘What is your return on equity?’ Now you don’t need to ask him that question because we don’t know the answer. We know the answer. Right? Here’s the answer, I’ll tell you what the answer is. But you need him to say the numbers. You need him to say the numbers because then people will start to realise that this narrative that Coles and Woolworths have created, ‘Woe is us; our job is so hard; it’s so hard, it’s so difficult, we’ve got margins that are so small’—yes, you do have margins that are small. But they small margins on $64 billion worth of sales. Right? So stop crying poor! What you’ve got to get this guy to tell you is what he return on equity is, because then people will see.” Coles and Woolworths have a return on equity that’s three times that of our banking industry, and our banking industry has the highest return on equity of any banking industry in the world. These guys are outrageously profitable. And I said to Senator McKim: “You’ve got to get him to answer this question, and you’ve got to, got to, got to hold the line.”

So I flew up to Canberra to give testimony, and I got off the plane and I got my phone out and I got on to the livestream to see what was going on. And [Woolworths CEO] Brad Banducci, who I’m terribly embarrassed to say is another South African—Brad Banducci is appearing before Senator McKim, and McKim has now asked him the question something like 24 times, “what’s your return on equity”, and he refuses to answer. And I see McKim saying to him: “If you don’t answer the question, we can find you in contempt of the Senate, and you can be facing six months in jail.” And I thought, “Whoa! I don’t know what I’ve started here, but I like it! I like it—this is good!”

RB Finally!

AS Break them up. We’ve got to break them up, Robbie. And the fact is, when I moved to Australia in 1997—I’ve been here for 28 years, can’t get rid of the accent. As I always say, you can go anywhere with a South African accent, except in society. When I got here 27, 28 years ago there was Franklins, there was Bi-Lo, there was Safeway. There was all manner of other supermarkets. I spent my first year in South Australia. There were other supermarkets in South Australia.

RB We had one in Queensland called Jack the Slasher.

AS Jack the Slasher. There were some in South Australia. There were others in Victoria. They’re all gone. Where did they go? They got gobbled up by Coles and Woolworths. And why? Because the ACCC has very limited power to stop a merger. And once all of those mergers have taken place and you’ve got too much of a duopoly, the ACCC has no power under the legislation to go “you’re a duopoly, we’re breaking you up”.

They’ve been breaking up duopolies and monopolies in the United States since they broke up Standard Oil in 1911. Since they broke up Ma Bell [the Bell Telephone group of companies] in, when was it, the 1930s or 1940s? Actually I can’t remember when they broke up Ma Bell.

RB It was around then. Before World War II, I think.

AS Standard Oil—1911. They’ve been doing this since, in the United States. We don’t have that power here.

RB No. But Albanese called it Stalinist. Even though the great capitalist economy of America did it.

AS Ugh. You know, it’s only “Stalinist” when it affects a duopoly, and the Boomer shareholders who’ve got lots of Coles and Woolworths shares. I’ll tell you what’s Stalinist. Stalinist is a monopoly like Qantas/Jetstar. Right? Anti-Stalinist—free market—is competition. So Anthony Albanese needs to somehow fix his attenuated, head-up-his-own-arse-disease problem, and realise that the reason people are not going to vote for him is because he’s done nothing about taking on these vested interests. Why? Because they’re the biggest party-political donors in Australia.

BANK CLOSURES

RB Yep—100 per cent, that’s what it comes down to. And then the inquiry that we worked together on, you and I, was on bank closures in Regional Australia. And again, your testimony was brilliant, and the final report reflected your recommendations—which was brilliant. You’ve already touched on it, of course; we talked about it earlier, with the disappointing way the Government’s greeted that. But any other comments on it?

AS I’ll tell you what really pisses me off. The 2024 inquiry into bank branch closures was a great inquiry. It was well done, Matt Canavan did a fantastic job; the recommendations were awesome. But I’ll tell you what pisses me off. This is not the first bank branch closure inquiry. We had one 21 years ago in 2004; and we got it in 2004 not because it became a problem in 2004. It had been a problem for five or ten years before that. So this problem has been festering for 25 or 30 years. Matt Canavan’s party was in government for 10 years. He’s brought down this great set of recommendations, but I wanted to say to him: “Did you—did this problem just pass you by for the 10 years you were in office? Why is it that when you’re in office you won’t fix it, but when you’re in opposition you start bleating about it? I don’t believe it anymore, mate—and nobody, no one else believes it anymore.”

And I tell you … you know, they say National Party voters are the most rusted-on in the country. And I got to say to you: no constituency has been served worse than the people who support the National Party. The National Party has done nothing to support people in rural Australia by saying, in the 10 years that they were in Government, “Listen: we’re the Deputy Prime Minister. We are one half of this government. We want the bank branch closures to stop, today. If they don’t stop today, we bring the government down.” They could have done that any day, of any month, of any year for 10 years that they were in office. That pisses me off. And it pisses me off that now that we’ve got this inquiry, what have we seen? A tiny little bit of movement from the government, the threat of a levy, which is not the way to go—it’s not strong enough. It’s not hard enough.

RB No. It was the weakest part of the report anyway.

AS But with the threat of a levy look what happened. “We won’t shut any more branches till 2027.” It takes the smallest amount of pressure, and the cockroach will stop breeding.

TACTICS TO MAKE A DIFFERENCE IN PARLIAMENT

AS That is the most frustrating thing, actually. And we noticed that—some banks jumped straight to attention straight away, the minute there was a little bit of push-back. And actually—well, we’re going to wrap this up, but I think this brings us to, again, the importance of getting you into Parliament, Andy. Because, you know, how do we make sure we’ve got a Parliament that consistently does take up these issues? And that means getting someone like you in there. But you’ve had all these experiences working with these inquiries. Did they give you ideas for how you would approach being a Senator?

AS A hundred per cent. I’ve looked at the testimony that was provided by people that I would be in disagreement with—the Property Council; Coles and Woolworths. And the first thing that occurred to me is that if you’ve got the facts under your belt, if you’re really in charge of the facts and you know what’s been going on in this particular field; if your questioning is aggressive; if you’re not willing to put up with any shit from anybody, then effectively you’re going to have a battle of wits with an unarmed person. And you can just take a stick and ritually beat them.

And if you beat them in a way that stresses sound bites—because unfortunately that’s the media environment we live in, right? So if you want to if you want to destroy the banking industry’s narrative, you’ve got to provide the media with the kind of sound bites; you’ve got to think about how you play with words. You’ve got to think about things like, for example just off the top of my head, the inquiry into PwC said to me, “What do you think about independent directors?” And I said to them, “You know what? Independent directors—there’s no such thing. Someone will technically be independent, but you go and make sure that the independent director you are appointing is one of your mates who won’t rock the boat. So there is a difference between”—and here’s the sound bite—“‘independent’, versus ‘inconvenient’.” Right? You’ve got to have those kind of sound bites so it gets picked up by the media. And then what you’ve got to do, is you’ve just got to beat and beat and beat and beat until the other side crumbles. And one of the things I’ve seen is, it doesn’t take long for them to crumble.

I’ll give you another example. There’s a Greens MP, Matthew Chandler-Mather, who said we should put a super-tax on big companies that are making excessive profits. Cry-baby Comyn, the head of Commonwealth Bank, went before Parliament and he said oh, that’s a very bad thing to say because it’ll reduce people’s confidence in big business. And I thought to myself: if I was sitting on that committee I would have said to him, “Mr Comyn, what about stealing money out of people’s accounts? Do you reckon that diminishes people’s confidence in big business? Because that happened while you were the CEO of the retail division. What about forging signatures? Because that also happened while you were the CEO of the retail division. What about money laundering? Because that also happened while you were the CEO of the retail division. And stealing money out of [this] and stealing money from [that]. Because all of these things happened while you were the CEO of the retail division. I’m just wondering, what diminishes people’s confidence in big business more: some inane comment made by Matthew Chandler-Mather, or the entirety of your career?” And then watch him squirm. Nobody does that, man!

And the other thing that I think is absolutely essential: if you get elected you cannot … you’ve got to understand, if anybody wants to give you anything—membership of the Qantas Chairman’s Lounge; seats at the footy; a trip to Paris; come and spend a nice weekend wine-tasting in the Yara Valley; a packet of God-damn chewing gum. Nothing is going to be given to you without an expectation of you giving something back. And I’m not up for it man! And I tell you Robbie, the greatest danger I face is not accepting a bribe—the greatest danger I face is being on an assault charge, because somebody offered me a bribe and I smacked them on their arse.

RB Those dozens, and probably hundreds of lobbyists trolling the floors and corridors of Parliament, they’ll learn to stay away from your office.

AS Well, they can come to my office, but it’s on the proviso—and they will they will be notified in fine print right, because they do it to everybody else in fine print, so I’m going to do it to them in fine print right? “Every meeting you have in my office and every conversation with me is videotaped and recorded and live-streamed.” So if you want to call me up and say to me, “How about a little bit of a trip to the Yarra Valley? And oh, we want something in return”—that’s going out live-streamed, buddy. So if you’re not comfortable with the public knowing what you’re offering me, be careful.

CONCLUDING THOUGHTS AND SENATE CANDIDATURE

RB Now I’m imagining, Andy, that the viewers watching this will think that’s exactly what we need, right—this is the cultural change we need in the Senate, but this is this capacity we need in the Senate. Because I agree with you, they don’t do it. With few exceptions; every now and then a senator shines on something they know about. But otherwise they’re not up to it—they’re not up to holding these institutions to account like you can and you will. So I’m sure people are loving this, but we’re running out of time; so what’s your final message to the voters who hope that when they vote, they’ll improve Australia.

AS Whoever you vote for, if you vote for the majors you’re wasting your vote. Right? They’re going to do nothing. It’s just going to be the status quo forever, and if you’re not one of the super-wealthy you’re just going to get progressively poorer and your kids are going to have no future there’s the Liberal party and the Diet Liberal Party—fewer calories, same great Liberal taste. Change government? Same government, just a different party. If I’m given the opportunity, I will do everything in my power to break and disrupt this status quo; but I also have to say to people, and I have to be honest with them: if I’m elected, I can’t fix the country’s problems on day one. I might be able to have an impact in places, and I will do my absolute best. I’ll have to work with other people. It’ll be little bits here and there, but it’ll be about setting an example. It’ll be about people going: “Why can’t you be an arsehole like Schmulow? He doesn’t mind being an arsehole to everybody else. Why aren’t you an arsehole like he is? Is it because you’re taking money from the pokey operators.” That’s the kind of that’s the kind of cultural shift—and you know, Margaret Mead once said: “Never underestimate the power of a few people to change the world, for in fact that’s the only thing that ever has.”

RB Well look, on that, I want to make one final political observation which I think really emphasises what you would be capable of doing when you’re in there, which is this: The fact that PwC tries to get you fired; the fact that the banks are so sensitive to the criticism, and the minute there’s a bit of push-back they jump, does reflect that there is already a sea change underway in Australia. It’s showing up in the non-major party vote. They had the Werribee by-election here in Victoria a couple of weekends ago, and the two major parties combined could not reach 60 per cent. They got 58 per cent of the vote—42 per cent of people voted against the major parties. So that’s already there; and the powers that be, these vested interests who rig the system and use their relationships with the two major parties to rig the system in their favour, they’re seeing that their minions in Parliament are losing their grip. And you’re getting this bigger crossbench, and it’s a bit chaotic; but in that chaos comes more transparency. And we’ve been part of that process. But I share your frustration. We’ve done a lot of work from outside the parliament.

AS Incredible work—unsung, incredible work. The Citizens Party is a mover and shaker. It’s like the best kept secret in federal politics.

RB That’s right. Well, the best kept secret to the electorate—the politicians all know, because they’re on the receiving end of what we do. But if we could get in there with the kind of capacity that Andy Schmulow represents we will change this country, and I think in bigger ways than people might expect. So Andy, thank you very much for joining us today. Thank you for being the Citizens Party’s candidate.

AS My privilege and my pleasure.

RB Thanks to the viewers for tuning in. If you live in New South Wales and you’ve watched this, you share this everywhere. This is the guy you need to vote for in the Senate in this coming election. Thanks for watching Citizens Insight.

END