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Category: Banking / Royal Commissions

More MPs back royal commission into banking sector

Monday, 11 Apr 2016 07:24:29 | Anna Henderson

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A number of Nationals MPs have now signalled they are open to Labor's banking royal commission, but the leader of the party Barnaby Joyce maintains the existing corporate regulator is just as powerful.

Nationals MP Luke Hartsuyker has become the latest Government backbencher to declare his interest in a royal commission, after Labor called on the Government to hold the national inquiry.

Labor argues the wide-reaching inquiry is needed to investigate allegations of fraud, dishonest and unethical insurance practices, shoddy financial advice and interest rate rigging at Australia's major banks.

Prime Minister Malcolm Turnbull and a number of his frontbench colleagues have played down the importance of holding a royal commission, with one minister calling it a Labor "stunt".

Mr Joyce, the Deputy Prime Minister, has poured cold water on the internal push for the commission to go ahead.

Banking royal commission could restore our faith


With evidence of new banking atrocities coming out almost daily, far from undermining global confidence in our system, a royal commission may be the last chance we have to shore it up, writes Ian Verrender.

He argues the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) are already doing the job.

"The powers of disclosure vested in ASIC and APRA are just as powerful as a royal commission," Mr Joyce said in a statement.

"Labor voted against a royal commission only 12 months ago. You have to ask why they are now suddenly jumping on this bandwagon."

Nationals John Williams and George Christensen are strongly backing the inquiry, while their colleagues Mr Hartsuyker and Ken O'Dowd have signalled they are open to the idea.

Mr Hartsuyker, who was dumped from the frontbench in the latest ministerial reshuffle, told Fairfax it was "definitely something that should be considered".

Mr O'Dowd said he was "open to the idea" but wanted to see more evidence to show whether it was needed. He said he was worried about the potential for an inquiry to damage the reputation of the nation's biggest banks overseas.

What is a royal commission?

Bill Shorten says an incoming Labor government would hold a royal commission into misconduct in the banking industry. We look at the role of royal commissions and what would likely be involved.

Another Government MP, Liberal backbencher Warren Entsch, is also in favour of the probe, arguing it is critically needed.

But Nationals member for the Victorian seat of Mallee Andrew Broad is cautioning against the commission of inquiry.

"I think we need to be very careful of trying to fall into a class warfare mentality that says the banks are somehow bad and therefore we need a royal commission into them," he said.

Shadow attorney-general Mark Dreyfus has questioned the Government's insistence that ASIC can do the job of a royal commission.

"There is no more powerful body to address systemic problems and misconduct than a royal commission," he said.

Mr Dreyfus argues ASIC can deal with individual cases and pursue individual allegations of wrongdoing, but "a royal commission has a far broader reach".

"It searches for the roots of the problem and identifies the context and causes of individual cases of misconduct, and how these can be addressed," he said.

"Because it is charged with examining an entire system, it can compel the production of documents and call witnesses from a wider pool than an individual investigation of the kind ASIC normally runs can.

"Only a royal commission has the broad powers to expose and address the systemic problems we can see in our financial services industry."

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