Bank Sponsorship Demeans The Australian Of The Year
The annual Australian of the Year award is in full swing again.
The States and Territories have all announced their respective nominations for the four prizes (including Youth, Senior, Local Hero, and Australian of the Year), and logistics are being finalised for the ceremony in Canberra on 25 January.
The award has been bestowed annually since 1960 to honour Australians who have made outstanding contributions to building a stronger, fairer, more sustainable society.
As usual with these sorts of public events, a line-up of corporate sponsors has been assembled. They win the right to parade their logos before the assembled audience (in person and watching at home), in return for helping to defray the costs of organising the festivities. Nothing unusual there.
But this time one of those corporate logos is jumping out at Australian audiences -- and for all the wrong reasons.
Many have expressed disgust that the lead corporate sponsor for the awards is one of the big four banks. Which bank? The Commonwealth Bank of Australia (CBA), a company branded as one of the worst offenders by the ongoing Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
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The Commission exposed thousands of breaches of responsible lending conduct, violations of the banking code of conduct, and instances of outright fraud at the CBA and other major banks. CBA CEO Matt Comyn acknowledged the bank’s failures before the Royal Commissioner last week. The bank has already paid $700 million in fines for breaching money-laundering and anti-terrorism laws 53,000 times (through the now-infamous ATM deposit scam). It was caught charging banking fees to dead people.
And the revelations haven’t stopped yet.
For example, one dodgy CBA activity criticised by the Royal Commission is CBA’s long-standing ‘Dollarmites’ program, which operates in hundreds of schools around the country. Purportedly designed to teach schoolchildren about good personal finance practices, it has become a thinly-disguised effort to market CBA products (including credit cards) in hopes of capturing young graduates for life.
Now the ASIC has announced it is investigating the program, and others like it, to determine its actual usefulness in financial education.
Another symptom of the CBA’s lack of long-term perspective is its foot-dragging on the issue of lending for new fossil fuel investments. Most financial institutions, motivated by prudence if not by ethics, have developed new policies limiting their lending to new fossil fuel projects -- in light of the obvious financial risks associated with investing good money into activities that will inevitably go out of business. The CBA, alone among Australia’s major banks, has no such policy, and continues to favour fossil fuel assets over renewable energy investments by nearly a 4-to-1 ratio, fueling global warming.
In short, whether through the malfeasance exposed by the Royal Commission, or through its day-to-day greed and short-sightedness, the CBA’s activities exemplify so much that’s deplorable about modern corporate culture in Australia. Australian of the Year, one of Australia’s highest honours, should hardly associate with it.
The Australian of the Year award is sponsored by a government-owned non-profit association, the National Australia Day Council. Its financial report for 2017-18 indicates that total external sponsorships generated $2.1 million in cash to help cover the Council’s operating expenses. That represented only 30 percent of annual costs last year; as usual with these arrangements, the corporate sponsors put up a minority of the money, but get most of the glory.
The external sponsors are highlighted in the Council’s promotional materials; not surprisingly, the annual report does not detail how much was provided by each one. Let’s generously assume that the CBA, said to be the largest sponsor, accounted for half of the total income from all sponsors -- or approximately $1 million. (Of course, that doesn’t include the cost of additional advertising aimed at drawing the public’s attention to the CBA’s generosity; like most corporate sponsorship schemes, the bank almost certainly spends more promoting its connection to the event, than it spends on the donation itself.)
So where does that munificence fit into the everyday reality of the CBA’s operations?
According to the bank’s 2018 annual report, it took in total gross revenue (from interest on loans, and fees and margins from other banking operations) of $40.4 billion for the financial year. That works out to $111 million in revenue per day (including Sundays and holidays!), or an astounding $4.6 million per hour.
So the $1 million that we estimate the CBA donated to the Australian of the Year process, accounts for 13 minutes’ worth of the bank’s revenue flow. In return for that piddling crumb from its coffers, the bank gets to wrap itself in the mantle of public service. This year, more than ever before, that mantle should be assertively reclaimed by society.
It’s one thing for Commonwealth Bank to sully its own name with its unethical behavior. We shouldn’t let it sully Australian of the Year.