No interest

Posted: 5 November, 2010 in My stuff
Tags: , , ,

It depends which side of the table you are on...

I was wanting very much to write something about the proposed changes to Australian tax law in regard to Islamic banks but I know I am not going to find the time the time this week.

Suffice to say that I heard an interview on our Local ABC with someone who was dead against it because ‘it is not part of our way of life.  It does not reflect Australia values’.  Mind you, I wanted to get the transcript so I could quote this bloke accurately but I couldn’t find it. They said it was available, unfortunately not though.

Anyway, he was on about the fact that an Islamic Bank did not charge interest and this was one of the things he said was ‘not reflective of Australian values’.   The greater concern from this bloke’s point of view was that changes to our law to accommodate Sharia Law (the operation of the bank reflects Sharia law).  That left me wondering what is reflective of Australian values within our banking and financial system?

In looking for his transcript I came across a few other interesting web articles.

One  from ABC News says “the global economic crisis has handed the Islamic finance sector a “golden opportunity” to show it is a better alternative to capitalism”.  The article makes the following points:

Islamic law prohibits the payment and collection of interest, which is seen as a form of gambling, so highly complex instruments such as derivatives and other creative accounting practices are banned.

Transactions must be backed by real assets – not repackaged subprime, or high-risk, mortgages – and because risk is shared between the bank and the depositor there is an incentive for the institutions to ensure the deal is sound.

Islamic finance also shuns investments in gambling, alcohol and pornography in favour of ethical investments.

In a Radio Australia News article citing Dick Warburton, an advisor to the Government on tax law, said ‘Sharia-style banking prohibits the payment and collection of interest and deems that all parties to a financial transaction must share in the risks and rewards involved’.

That same article went on to quote Senator Cory Bernardi,  possibly the bloke being interviewed that got me thinking in the first place, as saying “he feared permitting Sharia finance products would lead to fundamental changes in the finance sector.  The laws should not be changed to accommodate a system he regarded as incompatible with Western values.”  (Emphasis mine)

Is that our western vales are so anchored in making a  quick buck through gambling on the stock exchange and using other people’s money for high risk investments that we can not even consider an alternative, regardless of it’s origin, that values sustainable development that is no based on interest, where both the borrower and the inverter share in the risk, that avoids supporting investment in activities that are detrimental to the well-being of  individuals and society as a whole?

For many of us who have questioned the justice and integrity of the capitalist system perhaps we now have an option to consider.  Perhaps also the Muslims have been more concerned for financial justice than the Christians have been in this case.

A little footnote if I may: when I was young a silly and a very new Christian I read in the early books there that God’s people were not to take advantage of others by charging interest.  Wanting to do the right thing I went to my bank and asked them to not pay me interest.  Apart from thinking I was a  bit crazy they said they could not do it.  I have inquired  of the same at other financial institutions over the ensuing years; they have all said the same.  Some  have offered to  transfer the interest to charitable organisations or to put it in a  trust fund.  None that I have spoken to have a  no interest account

Exodus 22:25  Don’t charge interest when you lend money to any of my people who are in need.

Leviticus 25:35-36  If any of your people become poor and unable to support themselves, you must help them, just as you are supposed to help foreigners who live among you.  (36)  Don’t take advantage of them by charging any kind of interest or selling them food for profit. Instead, honor me by letting them stay where they now live.

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Comments
  1. Odd that senator Bernardi looks at the Islamic banks as being incompatible with western values. Both Australia’s and the US’s constitution mention God and though we are becoming more and more secular, we both acknowledge our Christian roots.

    It seems to me that the Islamic banks are more closely aligned to biblical Christian values than our current crop of money lenders. Have we, as a society, really drifted so far from Christ that fundamental Islamicists make us look this bad?

  2. […] This post was mentioned on Twitter by Nathan Harrison, Brian Pember. Brian Pember said: No interest: http://wp.me/pZQiD-7p […]

  3. Brian Pember says:

    Of course, having written the post I them found the transcript of the original radio interview. You can read it or listen to the interview here – http://www.abc.net.au/am/content/2010/s3054541.htm

    • chris says:

      Thanks mate – very insightful and a helpful corrective to the narrow minded thoughts that are popular.

      Did you ever try asking the bank if you could get a loan and not pay interest on religious grounds ?

      Cheers
      Chris

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