Frydenberg blames ASIC for ‘appalling’ banking conduct

Treasurer Josh Frydenberg has blamed the corporate regulator for the barrage of ‘appalling’ conduct by banks.

Josh Frydenberg with Winnie Xu at her coffee shop near his Camberwell electoral office in Melbourne. Picture: Nicole Cleary

Australia’s latest federal Treasurer, Josh Frydenberg, the nat­ion’s 40th, has blamed the corporate regulator for the barrage of “appalling” conduct unearthed by the Hayne royal commission, flagging the need for fast-tracked remediation for ­aggrieved customers.

In his first round of interviews since replacing Scott Morrison three weeks ago, Mr Frydenberg stressed the Coalition government’s fiscal record. “Don’t underestimate how much we’ve turned the good ship HMAS Budget around,” Mr Frydenberg told T he Weekend Australian in Canberra this week.

The energy minister in the Turnbull government, Mr Frydenberg chose the Treasury portfolio after winning the deputy leadership of the Liberal Party after Malcolm Turnbull and Julie Bishop lost their positions in a partyroom vote on August 24.

“I feel I’ve inherited an economy in good shape: the national accounts would indicate growth trajectory positive, the labour market is positive, and the policy settings around tax are also strong,” he said. Declining house prices in Sydney and Melbourne, he declared, were a “healthy” sign the market was returning to normal.

Describing the royal commission’s revelations as “appalling”, he flagged a new “remediation power” for ASIC to speed up compensation for mistreated customers. “This will be one new power we will consider implementing,” he told The Weekend Australian.

He left his toughest words for corporate watchdog ASIC. “How did this occur on their watch? They were obviously aware of examples of this misconduct but there weren’t penalties issued and the conduct stamped out,” he said.

Since the royal commission began earlier this year, ASIC has faced mounting criticism for not enforcing the law and disciplining banks and insurers enough.

“I think ASIC, and not the current leadership, has got a case to answer,” he said.

As treasurer, Mr Morrison appointed a new ASIC chairman, James Shipton, who succeeded long-serving chairman Greg Medcraft late last year.

Legislation to give ASIC more powers, including increased fines for financial services employees, is before the Senate.

“It’s completely unacceptable to hear about ­people being charged fees for no service, fees to dead people, companies allegedly lying to regu­lators and hundreds and thousands of breaches by ­offering insurance unsolicited,” he said.

Mr Frydenberg, who wouldn’t be drawn on an early return to surplus, appeared to rule out an early or late mid-year budget update.

As energy minister, he was responsible for the national energy guarantee, which the Prime Minister dumped last week.

On electricity, the government would have “laser-like focus” on reliability and getting prices down, he said.