Yahoo Finance Bank victims could get $2 million under Labor plan
The Australian Labor Party has promised to raise the threshold for compensation to $2 million for people hit by banks’ bad decisions.
The opposition made the announcement today, as it continues its bid to become the next government.
Labor said it will increase the compensation threshold from $500,000 to $2 million for those applying to the Australian Financial Complaints Authority because of credit issues.
The $2 million increase also applies to small businesses, which currently have a $1 million compensation threshold.
Affected Australians would also be able to claim greater compensation for non-financial loss in a bid to help those who have lost livelihoods, businesses or families. The current cap of $5,000 would be increased to $2 million.
Australians would be able to make claims for misconduct dating back to 1 January 2008, even if they have previously made an unsuccessful claim for compensation, or believe they were owed more.
Labor leader Bill Shorten said people should be compensated by the financial sector.
“The banking royal commission uncovered some of the worst conduct in corporate history. Businesses and houses were lost, livelihoods destroyed. And while compensation won’t undo all of the damage done by the banks, it will help victims rebuild what was lost,” Shorten said.
“Importantly, this won’t just include loss of possessions and assets — the banks will also have to pay for non-financial loss. Because we know that some of the worst losses have come not from a loss of possessions, but from the impact on people’s lives and identity.”
However, Treasurer Josh Frydenberg argued to the ABC that it’s not just the banks who will pay the levy for the increased compensation.
“If the balance is not struck right then (small business) could have trouble getting indemnity insurance and it could put them out of business. You need to be sensible and not engage in political stunts.”
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