In this hard-hitting episode of Chasing Financial Equality, Kane Jackson speaks with Dr. Andy Schmulow, Associate Professor at the University of Wollongong's Faculty of Business and Law, about the profound corruption, regulatory failures, and corporate misconduct plaguing Australia's financial system. Unlike many academics who tread carefully around powerful interests, Dr. Schmulow names names, cites specific examples, and refuses to back down in the face of intimidation.

With expertise recognised globally by the World Bank, United Nations, and multiple governments, Dr. Schmulow provides a devastating critique of Australia's "dystopian Wild West" financial industry, where misconduct occurs on an industrial scale with minimal consequences. From banks charging life insurance premiums to customers they knew were dead to insurance companies denying disability benefits to their own terminally ill employees, he details shocking examples of corporate misconduct that destroys lives while regulators fail to enforce meaningful accountability.

The conversation explores why financial regulation is uniquely challenging, the flaws in Australia's legislative approach, and how political corruption through mechanisms like campaign donations and Qantas's Chairman's Lounge membership perpetuates a system rigged in favor of powerful corporations. Dr. Schmulow advocates for principles-based regulation, campaign finance reform, media ownership diversification, and stronger market protection rather than business protection. Despite the bleak picture, he offers practical ways for citizens to fight back and hold elected representatives to the higher standard democracy demands.

Key Themes & Timestamps 1. Journey to Financial Advocacy (04:00 - 09:07)

Andy explains how his PhD research on prudential regulatory enforcement led him to discover "an overwhelming deluge of evidence of misconduct" in Australia's financial industry, making him the first academic to support a Royal Commission into the sector.

2. Scale of Financial Misconduct (09:07 - 11:56)

Examples of shocking misconduct including banks charging life insurance premiums to dead customers and insurance companies denying disability claims to their own terminally ill employees, with minimal consequences from regulators.

3. Regulatory Capture and Political Donations (11:56 - 14:05)

Discussion of how Parliament is captured by big business through political donations, with consulting firms like PwC donating $4 million annually to political parties while receiving $600 million in government contracts.

4. Uniqueness of Financial Industry Regulation (15:45 - 22:17)

Explanation of why regulating finance is uniquely difficult compared to other industries due to products being intangible "promises" rather than tangible goods, enabling regulatory arbitrage.

5. Failure of Rules-Based Regulation (22:17 - 27:12)

Critique of Australia's 5,000-page Corporations Act plus 43,000 pages of regulations as "unintelligible garbage," including "secret law" carve-outs that aren't published, compared to principles-based approaches elsewhere.

6. Regulatory Arbitrage Tactics (22:41 - 27:12)

Analysis of how financial institutions redefine products to avoid regulations, with even well-intentioned legal advice resulting in circumvention of regulatory intent.

7. Principles-Based Alternatives (27:12 - 29:52)

Discussion of principles-based, outcomes-determined regulation adopted in the UK, South Africa, and New Zealand as an alternative to Australia's failed black-letter law approach.

8. The Banking Social Contract (31:53 - 36:14)

Explanation of why banks owe special obligations to society, as taxpayers ultimately underwrite bank liabilities during crises and provide preferential borrowing rates through central banks.

9. Qantas Chairman's Lounge as Corruption (36:42 - 46:22)

Detailed analysis of how Qantas's exclusive Chairman's Lounge membership for politicians and regulators functions as "blatant, naked, up in your grill corruption," influencing government decisions like denying Qatar Airways landing rights.

10. Alan Joyce and Corporate Misconduct (41:35 - 44:26)

Criticism of former Qantas CEO Alan Joyce's $125 million in bonuses while engaging in practices like selling tickets on canceled flights and making it nearly impossible for customers to use flight credits.

11. Corruption Within Regulators (44:26 - 46:22)

Concern that even ACCC executives investigating Qantas were Chairman's Lounge members, questioning whether this influenced the relatively small $100 million fine for selling ghost flights.

12. Practical Solutions (46:56 - 54:32)

Advocacy for divestiture powers for the ACCC, politicians rejecting corporate perks, campaign finance reform limiting donations to individual citizens, and a Royal Commission into media ownership.

13. Media Distraction Tactics (52:28 - 54:32)

Critique of how media (particularly Murdoch-owned outlets) distracts the public with culture war issues like pronouns and flags while ignoring corporate corruption, crony capitalism, and tax evasion.

14. Call to Citizen Action (54:32 - 56:32)

Andy's call for citizens to hold elected representatives to an even higher standard than personal relationships, encouraging letter-writing campaigns and political involvement.