In his new role as the self-styled Salvador Allende of the Lower North Shore, shadow treasurer Joe Hockey has had an interesting couple of weeks in his battle with the banks.

Mr Popularity, at least with the public. Photo: Gary Ramage

He’s been teased by his opponents, white-anted by his colleagues, endured the accidental embarrassment of being labelled part of the “lunatic fringe” by Liberal backbencher Don Randall, who mistakenly assumed the call for government intervention on bank profits had come from the Greens.

Yet out there in punter-land, Joe Hockey is being hailed as a hero. Say what you like about cheap populism, it’s certainly popular.

As of 5pm on Thursday, there were 332 comments on the news.com.au report on the criticisms ANZ chief executive Mike Smith had made of Hockey’s remarks.

The comments were running about 10 to one in Joe Hockey’s favour - which isn’t really that surprising, given that Mr Smith had just announced that the ANZ had made a $5.1 billion cash profit, a lazy $200 million beyond market expectations.

If anything, the readers were of the view that Joe Hockey had not gone far enough and that what was really needed was an immediate government-sponsored seizure of bank assets, with fines for any banker who would dare to raise the standard variable home loan beyond any increase in the RBA’s official cash rate.

You can understand the sentiment. Annoying, niggardly, penny-pinching fees make up a significant portion of the ANZ’s thumping $5.1 billion profit. The same goes for the Commonwealth’s $5.6 billion. And the NAB’s $4.2 billion. And the $6 billion Westpac is likely to unveil this week.

These huge numbers also make it much harder for bank chiefs to explain why they feel the need to stump for increases in mortgages when interest rates haven’t actually gone up.

So Joe Hockey might be a figure of fun for the government, and a source of discomfort for many in the Opposition, none more so than Tony Abbott, who wanted the ground to swallow him up the other day rather than answer the simple question of whether he supported his Shadow Treasurer’s nine-point plan to combat the rapacious Big Four. But on talkback and on websites he is a true man of the people.

The question which Joe Hockey should ask himself is what good this new Robin Hood status will actually do him and his party in the long run.

There are two issues at play here for Hockey. The first involves disunity. The second involves delivering on what he has actually said.

While people might passionately endorse Hockey’s sentiments about bank profits, they are just as likely to conclude from the political backdrop to his remarks that the Coalition is all over the place on this issue, that Hockey is some kind of lone ranger, taking a stand which does not have the formal backing of his leader or the party room, and with which many of his colleagues clearly disagree.

There’s also a sense that he is being oppositionist in his stance. Sure, he’s getting a dream run on commercial television and in the popular press, across talkback radio, by jumping up and down on the issue. But it’s an issue which the Liberals, as the traditional party of business, would never pursue in government, unless they have suddenly decided under Citizen Joe’s influence that the socialisation of corporate profits is their new ethos.

Voters are wise to this sort of stuff. They have a good radar for telling when a politician who has done one thing in government does something else in opposition. That is the territory Hockey is in.

Prime Minister Julia Gillard has been bandying about the term “economic Hansonism” of late to suck up to business and ridicule the Coalition. If you’re looking for an example of what this term could mean, Labor’s period in Opposition between 1996 and 2007 provides a few good examples, such as the stand the party took against tariff cuts in the car industry in John Howard’s first term. It was a bit rich coming from the same people who brought down the Button car plan. And while it might have won them plenty of empty cheers on talkback in South Australia and Victoria at the time, it didn’t win them a seat.

For his own long-term credibility with voters, and his own standing within the Liberal Party, Joe Hockey should probably reflect on that. Populism might be cheap but it also comes at a price. 

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39 comments

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    • Farkurnell says:

      06:23am | 30/10/10

      It getting close to year end..the bank bashing season is in full swing.santa’s on his way and then we can go on holidays.
      Crazy Joe the socialist member for North Sydney.Bash’n Banks is not a novel idea its been around for a while,most people including me despise banks because of there control on our lives.It easy to wish banks would change there attitudes ,its up to our political leaders to influence that change without upsetting our thriving economy built around financial stability.Joe has always reminded me of a used car salesman.When he talks it looks all nice and shiny,when you take it for a spin the gearbox stalls and oil starts leaking.Its been interesting reminiscing this week with Howard & Costello ,but it does hightlight the ineptitude of Crazy Joe & Jetlags, they are still living in there shadows

    • Hockey Stickler says:

      07:29am | 30/10/10

      It seems people power is not to be listened to.  Instead the overpaid CEO’s rave on about Hockey’s use of populism instead of actually listening to the people.  So I’m all for Hockey using his stick to beat up the banks.

    • Andrew says:

      11:07am | 30/10/10

      What stick? All Hockey is really doing is giving them an ear bashing. His 9-point list of suggestions about things the might be a good idea to do is simply a toll for opposition only. The purpose of it is to get him some attention and make it look like he is doing something to “stand up for consumers” when in reality of he ever does get to be Treasurer he will run from these 9-points faster than anyone thought was possible for a man of his size.

    • Vixen says:

      04:34pm | 31/10/10

      Absolutely… Apathy is tragic .....Bring on the sticks.

    • Wayne Fehlhaber says:

      06:43pm | 31/10/10

      Andrew :  At least he is conscious of the problems associated with the
      banking system being experienced by a long sufferring public.
      I suspect you would would have singled Joe Hockey out for a bucketing if he failed to address matters to which we can all relate. It is true that banks largely police themselves and conservative governments are unlikely to pursue them whilst in office for obvious reasons.
      The good effects of Hockey’s stance is in bringing the public’s focus of attention to the banking industry’s shortcomings.
      There is nothing worse for banks having to face embarrassing public scrutiny .  You can bet your life that if anything will force the banking industry’s hand , unwanted public attention and scrutiny will do the trick better than government legislation.

    • Andrew says:

      12:36pm | 01/11/10

      Wayne, the public have known for a very long time the “shortcomings” of the banks. Joe Hockey hasn’t made some remarkable discovery and then doing us all a favour by letting us know about it.

      To your other point about legislation, if the four banks really are acting as a collusive oligopoly only legislation can fix the problem. The banks know that the majority of consumers are too lazy to actually go out and find other alternatives to the Big 4 so even increased attention won’t make them change their ways. Especially when they have people locked in to mortgages with high exit fees.

      If Joe Hockey was serious his plan would include legislating to set exit fees at a level that would encourage the banks to compete because customers could refinance if their banks interest rates were higher than competitors instead of the situation we have now where the cost of switching is so high that it outweighs the potential savings of lower interest rates from competitors.

    • Fiddlesticks says:

      07:37am | 30/10/10

      Look, mate, if we’re all just “punters”, that makes Hockey poor old “Drongo”.

      Fitting, eh.

    • Joan says:

      08:13am | 30/10/10

      I didn’t take much notice of Hockey`s banking comments… just heard the usual snipes coming from,  Labor, media, and some Libs .  Then the arrogant Mike Smith came on the scene, and bucketed Hockey and instead of arguing a case against Hockey points ... point by point Smith set out to belittle Hockey comparing him to Chavez of Venzuela and Costello ... (with no mention of Swan the Treasurer of the day). That really got up my nose, enraged me and Smith`s diatribe convinced me that the Hockey way is worth a look at. When a business man starts to assasinate a persons ability rather than presenting a case for maintaining status quo- then perhaps he has something to hide.  Sometimes like Hockey you have to be the Lone Ranger to start a new way of thinking or process, that`s how change happens.  Let`s not forget Greenspan, of USA preGFC… the world,  financial markets, media, hung on to every word he uttered before they moved, then post GFC Greenspan wept as he said he had got it wrong. So don’t believe that Smith has the right answer.- he didn’t give one… he just slung mud at Hockey. The people will be on Hockey`s side ... until the banks give some straight answers.

    • Anthony of WA says:

      08:14am | 30/10/10

      The Banks in Australia did well through the GCF because they we more regulated that other banks around the world, had they not been they would have been upto the same BS that got other banks in trouble. At the sign of trouble who is asked to back them up? us the tax payer, the problem passes and they turn around and kick us in the nuts. They need to be made aware they are part of the community and be made to realise they are there to provide a service, no problems with them making a profit, which is the point of a business, but the attitude of, is you need us so you can not let us fail, needs to be adjusted

    • Adam Diver says:

      08:22am | 30/10/10

      Originally I thought what an idiot, what a stupid, stupid idea. Then I read the 9 point plan, and the ideas were not half bad.

      Did hockey actually say the government will control interest rates or was this the media taking a little latitude?

    • Adam Diver says:

      10:29am | 30/10/10

      Don’t worry found out for myself. Labor said that and the media just ran with it. No wonder half the populace has no idea, MSM give you nothing, you have to actively find out infomation to have anything near the truth.

    • farkurnell says:

      09:04pm | 31/10/10

      OK adam ,lets look at Joe’s plan ,,,a banking enquiry to be run by a banker. I can tell you the result now…minor changes but basically Status Quo. How about Joe comes up with something original.

    • Daniel says:

      08:42am | 30/10/10

      Well Hockey now has the support of the Greens so that can only help him.

    • acotrel says:

      08:33am | 31/10/10

      ‘support of the greens’ - sounds like the ‘kiss of death’ to me! The last time I was in an ANZ bank, I had to queue up to get a withdrawal form, and queue up again to make the withdrawal.  They don’t seem to have a customer focus?

    • Andrew says:

      09:06am | 30/10/10

      How about someone for a change talk about the 9 point plan instead of playing juvenile media games. All you guys seem interested in is playing games about personalities and who’s scoring points on what side.How about a discussion on what his 9 point plan is Penbo. Time for some of you guys to grow up. Maybe you should read this article, because your a big part of what Jonathon Green is talking about.
      Hockey has good idea, no-one takes notice
      http://www.abc.net.au/news/stories/2010/10/29/3051761.htm?site=thedrum

    • Rob says:

      12:15pm | 31/10/10

      Completely agree, Andrew.  The idea that “Citizen Joe” is talking about ” the socialisation of corporate profits” is absolute crap.  He’s talking about improving competition and transparency.  The two are vastly different.

    • Greensborough Growler says:

      09:52am | 30/10/10

      Those who the Gods wish to destroy, they first make popular.

      Popularity can wax and wane especially during the transition from talking about a plan and not implementing same when they have the opportunity.

      Respect is hard earnt and enduring.

      Menzies was right, “Promise them nothing and make sure they get it”.

    • Brian B says:

      07:29am | 31/10/10

      Good Grief GG - what has your rant got to do with the issue?

      Have you actually read Hockey’s plan, which espouses some good ideas on controlling greed within banking corporations?

    • nosthow says:

      04:18pm | 31/10/10

      @MarK - wow you sure are earning your $3 and hour the Libs are paying you fella to be Blog Monitor ! Gooooooooo Marky ! But bugger - Labors in power !

    • MarK says:

      04:23pm | 01/11/10

      Just a tip Nosthow.

      Insults always help if you attache them to the correct post - just saying.

    • MarK says:

      10:32am | 30/10/10

      Tell you what Penbo why don’t you have a look at Hockey’s 9 point plan instead. Reading your article I really don’t think you are across it at all or even if you have read it.

      Interestingly enough The Punch hasn’t even published the points that I can recall or that I can find. So all we are doing is talking about the msm that is talking about a poor choice of word - levers - and gillard and Swan in 24 hour cycle mode.

      Why not look at the points instead of the spin.

      Well lets try that hey? (from http://www.smh.com.au/business/joe-hockeys-ninepoint-plan-20101028-174jw.html)

      1. Let’s give the ACCC power to investigate collusive price signalling (that is, oligopolistic behaviour), which is exactly what Graeme Samuel has called for;

      2. Let’s encourage APRA to investigate whether the major banks are taking on unnecessary risks in the name of trying to maximise short-term returns that conflict with the preferences of those that backstop the system, namely taxpayers;

      3. Let’s formally mandate the RBA to publish regular
      rather than irregular
      reporting on bank net interest margins, returns on equity, and profitability so that we can all determine whether the major banks are extracting monopolistic profits; that is, whether taxpayers are effectively subsidising supernormal returns;

      4. Let’s investigate David Murrays proposal for Aussie Post to make its 3,800 branches available as distribution channels for smaller lenders. To be clear, the Coalition does not endorse Australia Post assuming balance-sheet risk and getting into the banking business itself;

      5. Let’s ask the Treasury and the RBA to investigate ways to further improve the liquidity of the residential and commercial mortgage backed securities markets, which are an alternate source of funding for smaller lenders, including consideration of the Coalition proposal to extend the Governments credit rating to AAA rated commercial paper in those markets to improve liquidity;

      6. Let’s explore further simplification of my beloved Financial Services Reform Act, to make the business of actually getting out and doing business easier and simpler;

      7. Let’s direct APRA to explore whether the risk-weightings on business loans secured by residential properties are punitive. Many small businesses tell me that they do not receive sufficient financial benefit from pledging their family home to secure their borrowings;

      8. Let’s commission a resolution to the debate about whether the banks should be able to issue .covered bonds., in the same way other jurisdictions allow their banks to, which provides a more affordable line of credit;

      9. And let’s wrap up all of this work into a full review of the financial system
      a Son of Wallis, or Grandaughter of Campbell, whatever you will.

      So lets analyse the plan shall we and see if it actually gels with this left wing Green plan or economic Hansonism - that awesome call from the labor party the last bastion of “true reform”

      So

      1. Let the ACCC see if the banks are being predatory and collusive on pricing - hmm the Liberal in me has to say that is OK

      2. Let APRA have a look at some practices of the banks to make sure taxpayers are not exposed to risk from entrepreneurial behaviour - the Laberal in me is still snoozing

      3. More regular reporting from the RBA, making sure we are not getting ripped off? So we want to ensure the market is working freely and openly. Sign me up

      4. Increase competition in the sector. Private competition…not government. What is so radical about that. Sounds good

      5. Get Treasury and the RBA to look at ways to improve liquidity in markets that provide funds to lenders. Well gosh, still no stirrings of outrage here.

      6. Simplify business through cutting some red tape. Gosh - these crazy ideas keep coming

      7. Check that small business people are not being stitched up when they pledge their house for a loan. Hmmm spidey senses tingling. Intruder alert. But no…false alarm. I mean really - we can all live with that I am sure.

      8. More increase in prime funds sources for loans. Well discussions to that end. Nice.

      9. Review of the system as a whole…..ok I groan here. More committee’s but I guess those backbenchers need to have something to occupy them.

      So in summary we have a call for review and reform of the banking sector. We have people screaming for policy. Here is excellent, sensible and rational policy.

      Unfortunately Joe used the word levers allowing a media blitz by the government.

      Dig a fraction below the surface, take one step back and you see the spin. Not only from the government in saying NO to reform but of the press being incredibly lazy and not looking at the issue.

      Penbo you have missed the main story. It is a story about reform and good ideas.

      No wonder guys sitting on a few billion of half yearly profits are worried. might have to share it.

    • BobyDan says:

      05:37pm | 31/10/10

      Hear, hear I will second that motion.

    • Steve_of_Cornubia says:

      10:48am | 30/10/10

      The usual Lib-bashing from Penbo. It’s funny how, when Labor come up with a popular policy, we hear that it’s ‘representing the people’, but when a Liberal does it, he’s employing ‘cheap populism’.

      Care to explain the rules Penbo, because you’ve got me baffled.

    • acotrel says:

      10:40am | 01/11/10

      Steve, ‘cheap populism’ is when a conservative politician comes up with a policy which is strikingly similar to the Green’s stance on things! Pull the other one,it’s got bells on it!

    • Sven Gali says:

      11:20am | 30/10/10

      I’m not sure that the stand the (Labor) party took against tariff cuts in the car industry in John Howard’s first term was a major reason why they might not have won seats, and I’m certainly not convinced that voters are wise to this, or any other kind of stuff for that matter, which is why you can’t go wrong bashing banks.

      For their part, they’ll continue laughing all the way to the proverbial, while reminding us that we can always hide our cash under our mattresses if we like.

      The best part of all of this is seeing the Coalition supporters marching arm in arm with Bob Brown and the Greens, out there on the “lunatic fringe”. Thanks, Don Randall.

    • Gregg says:

      11:55am | 30/10/10

      Joe is one guy who probably more than others is prepared to call a spade a spade, most occasions anyway.

      This time around from what I can gather he is promoting that banks should be more competitive and that can do no real harm.

      Yes Andrew, we should see the Nine Points more widely known.
      As for:
      ” While people might passionately endorse Hockey’s sentiments about bank profits, they are just as likely to conclude from the political backdrop to his remarks that the Coalition is all over the place on this issue, that Hockey is some kind of lone ranger, taking a stand which does not have the formal backing of his leader or the party room, and with which many of his colleagues clearly disagree. “

      I do not know that people will necessarily take to much to heart as far as the Coalition being all over the place but perhaps some surprise at the thoughts coming from the coalition and when it settles down, it could be that Treasurer Swann will be exceddingly embarassed that he has not come up with something as constructive when he himself has been berating banks on interest rates when he chooses to do so.

      Good on ya Joe, you show them the way.

    • Jardin says:

      12:31pm | 30/10/10

      Funny how “the people” didn’t support the mining tax in full despite the fact it was really just a tax on the people’s resources that the mining companies never paid for and are getting exorbitant prices for right now. They’re also not doing anything for the community as a recent 7:30 Report item shows.

      But I guess if someone might be seen to threaten you ability to drive a truck and earn $250k per annum then you’re not going to support it.

      Fact is, Hockey’s proposal is lazy populism at best. Banks may seem to earn a high amount of money but their ROE is very low. Moreover, there is plenty of competition out there from other financial institutions (credit unions, building societies and some of the smaller banks).

      Further, banks are finding that their funding costs are increasing. Overnight money markets are getting tighter post-GFC.

      We freed banks years ago. It was one of the best things we ever did. It allowed for a more competitive economy. To shackle them now would be sheer folly just because a bunch of bogans have gotten in over their heads and don’t like what they see.

    • Peter Garrett Sold His Soul says:

      02:24pm | 30/10/10

      I’ve really got nothing to say here only to announce my ename for this site.  Mia Freedman quotes you so much on her site that I’d thought I’d have a look.  Quite interesting to read political views with an opinion as opposed to boring old fact.

    • Michael says:

      02:25pm | 30/10/10

      I actually agree with Joe on the bank interest rates… Banking is about the only product in this country which is a basic need that is not controlled or regulated. The cost of bread, milk, public transport, power, gas, water and just about anything else that’s a basic need gets controlled. Even petrol prices get close scrutiny. At the last election, we were promised grocery prices would be “watched” a.k.a. controlled. Banks make massive profits and charge massive fees and margins, hitting soft targets (retail customers) hard. It’s not as if we have a choice of not using a bank - we could not survive in society without banks. We are a captive market - what marketers call a hostage market. If the banks cannot be trusted, then they need to be regulated in some way.

    • BobbyDan says:

      02:55pm | 30/10/10

      Hockey is a Billy Bunter character with a sence of humour, but worth listening to. Much more believable than his leader.

    • Ben81 says:

      05:41pm | 30/10/10

      “endured the accidental embarrassment of being labelled part of the “lunatic fringe” by Liberal backbencher Don Randall, who mistakenly assumed the call for government intervention on bank profits had come from the Greens.”

      What i’ve heard more than a few times since then is that Don Randall was actually replying to a direct question about Greens policy, and it was then made to look like it was a response to what Hockey said.

    • MarK says:

      04:27pm | 01/11/10

      He was.

      It was spin form the msm.

      I will find a link somewhere.

    • Will says:

      05:59pm | 30/10/10

      I agree with “Andrew”. Big joe could be on to something so we should take him seriously.
      And as for populism he’s already paying the price - by earning the ire and ridicule of the business classes and through the risking of the unity of his party

    • Go Go says:

      08:59am | 31/10/10

      You ;can bank on the banks to pay their CEO’s obcene amounts - that’s the only way the fat cats can work.  Money, money, money, it’s a rich man’s world so naturally Joe’s idea is popular amongst us who don’t get half of what the CEO’s get in a week.  Go, Joe, go!

    • Sven Gali says:

      01:56pm | 31/10/10

      I’m not sure that the stand the (Labor) party took against tariff cuts in the car industry in John Howard’s first term was a major reason for them not to win seats, but I’m certainly not convinced that voters are wise to this, or any other sort of stuff for that matter, which is why you can’t go wrong bashing banks.

      For their part, they’ll continue laughing all the way to the proverbial, while reminding us that we can hide our cash under our mattresses if we like.

      The best part of all of this is seeing the Coalition supporters marching arm in arm with Bob Brown and the Greens, out there on the “lunatic fringe”. Thanks, Don Randall.

    • vixen says:

      04:41pm | 31/10/10

      ANZ need a really big stick !

    • Jane says:

      04:48pm | 31/10/10

      Of course it’s poopular, the banks are ripping us off stupid and people like me are sick of it. What’s Swan doing about it except trotting around trying to find the next slogan he can throw to the media about Hockey and the Libs. The media seem to love any slogan Swan and Gillard come up with. Swan and Gillard should start running the country instead of constantly playing games with the media and Opposition. Time for the Government to start acting like a Government and time Gillard starting showing she’s a leader and acting like a Prime Minister.

    • Luke says:

      07:04am | 01/11/10

      If it were Wayne Swans 9 point plan he would be reported as courageous and a hero standing up to the banks.

    • Peter says:

      02:11pm | 01/11/10

      Government control of interests rates and currency isn’t hurting China very much at the moment. Perhaps we should leave our lives up to overseas speculators instead?

 

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