Treasurer Scott Morrison will meet the Australian Securities and Investments Commission this week as part of efforts to head off a royal commission into the banks by boosting regulators’ powers and resources.
A senior Coalition source told The Australian Financial Review the government was fully aware of the political potency of Labor’s call for a royal commission and was actively sharpening its response to avoid becoming wedged during the election campaign.
“No one wants to get caught flat-footed on this one. We know everyone has issues with the banks,” he said.
Labor, too, stepped up its case on Tuesday, dismissing claims by the government that such bodies as ASIC were the equivalent of a royal commission.
From the AFR:
“ASIC does a good job, but a royal commission into banking is the most serious form of inquiry that a government can commission on behalf of the people of Australia. It has broad ranging powers and it can look at systemic issues which ASIC simply can’t,” said Labor leader Bill Shorten.
Mr Shorten said Labor’s call had “crystallised the thinking of millions of Australians”.
Yep. And although it is a good idea for the Coalition to trail Labor into the battle with some version of their own in “policy lite” terms, which they should have done on negative gearing, super and carbon, it is too little too late and intrinsically hands policy leadership to Labor. The Coalition can’t compete with a Royal Commission and provisioning the very regulators that failed to prevent malfeasance with greater resources is putting the solution before the problem is fully understood and defined.
Labor’s policy received a further boost as bank chairman have come out and condemned the proposal, from The Australian:
Three of the four major bank chairmen have strongly condemned calls by the Labor Party for a banking royal commission, describing it as “totally unnecessary” and a distraction from the implementation of policies recommended in previous industry reviews.
As the federal government panned Labor’s plan to bring the banks to heel, corporate watchdog chairman Greg Medcraft said ASIC already had strong coercive powers and was clearly “on the job”. Mr Medcraft said the commission’s record, including court action in recent weeks against ANZ and Westpac over alleged manipulation of the bank bill swap rate, also demonstrated it was not afraid of “taking on a big fight”.
But Westpac chairman Lindsay Maxsted said Australia was recognised internationally as having one of the world’s best banking systems, along with an effective regulatory regimen. “A royal commission is totally unnecessary,” Mr Maxsted told The Australian.
“There have been isolated issues within the banking system, particularly in relation to financial planning and insurance, but these are being dealt with. The allegations in relation to market manipulation of BBSW by various banks are disputed and unproven.
“Any problem issues identified within the system are capable of being, and actually are, dealt with by our regulators with extensive co-operation from the banks themselves.”
National Australia Bank chairman Ken Henry and ANZ chair David Gonski agreed with Mr Maxsted, while Commonwealth Bank chair David Turner could not be reached for comment.
The three need a public relations lesson. Never throw fuel on a burning fire. The more the bank’s dump on the Royal Commission idea, the stronger it will get. Amazingly, the banking lobby is considering handing the election to Labor on a platter, from Fairfax:
Bankers Association chief Steve Munchenberg has refused to rule out a mining tax-style ad campaign to fight Labor’s proposed royal commission into the banking and finance sector.
The head of the nation’s banking lobbying cautioned the lobby group is not “actively considering” an ad campaign at this time, ahead of an expected July 2 double dissolution election, but said it remained on the table as one of a range of options under consideration.
And marketing consultant Toby Ralph, who has worked on 50 election campaigns across 3 continents including for the former Howard government, said he had “no doubt the banks can run a campaign that will turn the political opportunism of a royal commission into an electoral nightmare for Labor”.
Note to self: short Toby Ralph. Big banks in league with the Coalition against a righteous national examination of bad bank behaviour on a grand scale? It can only damage the government.
It’s another policy coup for Mr Shorten and another whopping failure for Prime Minister Turnbott.
