Government promises ‘immediate’ action in wake of banking royal commission report

The government keeps getting asked the same question about the banking royal commission - and each time, refuses to give a straight answer.

The government is refusing to admit it made a mistake by opposing a royal commission into the banking sector for so long.

Since Kenneth Hayne’s report was released yesterday afternoon, Treasurer Josh Frydenberg has repeatedly faced the same question.

“You said you’ll act on everything in this report. Given that’s 76 things that need fixing, was the Coalition wrong to strenuously oppose a royal commission into the banks for as long as it did?” 7.30 host Leigh Sales asked him last night.

“Look, we can debate for hours, Leigh, what Labor failed to do when they were in office ...” Mr Frydenberg began.

“I’m asking about you,” Sales said, cutting him off. “You’re in office. I’m asking about you.”

Mr Frydenberg said the government initiated David Murray’s financial systems inquiry when it first came into power. But Sales wasn’t buying it.

“Everyone remembers that you opposed the royal commission,” she said.

“I don’t want to waste time by running through quotes, but why should the public trust this Coalition government to clean up the banks when you had to be dragged to that inquiry in the first place?”

“Well, we did call the royal commission and today we’ve responded to it,” he replied.

“You did have to be dragged into it,” she pointed out.

“And today we have said we’re taking action on all 76 recommendations,” he said.

“These are recommendations that will have far-reaching consequences across the financial system, including putting in place the banking executive accountability regime, not just within banks which we initiated, but with an insurance and superannuation companies, ensuring trustees of superannuation funds actually face penalties for breaching of their duties.

“Putting in place a new disciplinary body that deals with financial advisers. There’s a whole series of recommendations that Commissioner Hayne has handed down which we have adopted today.”

Leigh Sales wasn’t the only journalist to ask Josh Frydenberg about the government’s opposition to the commission.

Earlier, Mr Frydenberg was twice asked the same thing during his press conference immediately following the report’s release.

Both times, he responded by criticising Labor.

“We could debate for hours the failures when Labor was last in office, not forgetting that … and I recall Bill Shorten saying how fantastic the sector was when he was the minister for the sector,” he told reporters.

“But he didn’t call a royal commission or take action to bring these big banks to account. He didn’t put in place new standards which we have announced today, and have been doing since the financial systems inquiry was initiated by this government when we first came into power in 2013.”

Asked by another journalist if he would apologise to the Australian public for voting against the commission 26 times, the Treasurer said: “Let me be very clear: the government is now acting on all 76 recommendations, and we are even going further in some respects.

“We can debate for hours Labor’s failures when they were last in opposition. It has been the Coalition that has commissioned the royal commission and the Coalition that today is announcing the recommendations.”

This morning former prime minister Malcolm Turnbull popped up in Melbourne and immediately answered the question Mr Frydenberg had been so persistently avoiding.

Mr Turnbull was asked whether he regretted his own opposition to a royal commission.

“I do,” Mr Turnbull admitted. “I think we should have got on with it earlier.”

The former prime minister said he and Mr Morrison were working on a compensation scheme for the banks’ customers at the time, and felt a royal commission would delay it.

“I could see that the problem was a failure of responsibility and trust, and I wanted to get on with it and deal with it quickly,” he said.

“We were well advanced with a compensation scheme to deal with the victims of various bank malpractices, I suppose, is the best way to describe it. And that was put on hold when the royal commission was set up.

“So I expect that Scott Morrison will dust that off and get back out there.

“We weren’t seeking to protect the banks. Our approach was to act as swiftly as we could to ensure that people who had been wronged were compensated, that people who had done the wrong thing were held to account, were prosecuted.

“You can make a very good case for saying it was started perhaps a year later than it should have been, or 18 months later than it should have been.

“I believe, with the benefit of hindsight, that we should have held the royal commission earlier.”

.@TurnbullMalcolm: @ScottMorrisonMP and I were well advanced with a compensation scheme so I expect he will dust that off. We weren't seeking to protect banks contrary to what @AustralianLabor would have you believe.

MORE: https://t.co/GTLbtBm23H #AMagenda pic.twitter.com/m5pa2w2MIj

— Sky News Australia (@SkyNewsAust) February 4, 2019

‘HOME BUYERS AND LENDERS WILL BENEFIT’

Home loans won’t be harder to get because of a crackdown on shoddy business practices by lenders, Mr Frydenberg said yesterday.

And any disruption caused by the royal commission was now over, he said.

Mr Frydenberg was speaking soon after the public release of Kenneth Hayne’s damning royal commission report on the financial sector and the government’s acceptance of his 76 recommendations.

“I think all home buyers and lenders will benefit from these recommendations,” he told reporters.

But he outlined tougher policing of financial institutions such as banks and superannuation funds, and endorsed less timidity in confronting poor practices which hurt consumers and borrowers.

“What Commissioner Hayne has done is shine a light on misconduct in the sector which has not only been in breach of existing law but has fallen well below community expectations,” said the Treasurer.

Labor’s shadow treasurer Chris Bowen said the opposition would back government legislation to implement the Hayne measures but questioned whether there would be time in the curtailed parliamentary sitting period — which has to include the April 2 federal budget — before the election, which is expected in mid-May.

Mr Frydenberg said the government would move “immediately” on legislation increasing penalties for breaching of standards by trustees and company directors.

And he rejected Labor’s arguments that the action on misconduct should have happened more than a year ago, but was delayed by the government’s persistent rejection of the royal commission proposal.

“It is actually the government that’s been delivering better consumer outcomes for Australians with reforms that we’ve been making,” Mr Frydenberg said.

Both sides of parliament will now watch the economic impact of the royal commission and the government response, with home buyers a particular focus.

Mr Frydenberg said the flow of bank credit was below the 10-year average because of a number of factors.

“One of the factors no doubt has been the existence of the royal commission,” he said.

And that meant the inquiry would not be extended and would not need to be extended.

“(Commissioner Hayne) has heard from more than 10,000 submissions, all of which have been read, taken into account,” said the Treasurer.

“When you are looking at a key artery of the economy — namely, the financial system — you don’t want to be working on it longer than you have to because you don’t want to introduce an element of uncertainty.

“That uncertainty has now been lifted.”