Pressure builds for Parliamentary banking inquiry

By Leith van Onselen

After narrowly holding-off a banking Royal Commission in September, internal pressure continues to build on the Turnbull Government for a warts-and-all inquiry into Australia’s banking sector.

Last week we witnessed Coalition MP George Christensen pledging to support Bob Katter’s private members’ bill to set up a Commission of Inquiry into the banks.

And now we have former senior Coalition minister, Andrew Robb, reportedly pressing the case for a banking Royal Commission during the recent A50 investors conference in Sydney. From The AFR:

Sources have told The Australian Financial Review that Mr Robb pressed Financial Services Minister Kelly O’Dwyer on the issue during a closed question-and-answer session at the A50 investors conference in Sydney last Friday.

According to people in the room, Mr Robb said Labor was never going to give up on its push and holding a short commission with limited terms of reference would end the political damage the government was experiencing by defending the banks. He also argued it would be a good opportunity to demonstrate internationally that the banking system was in good shape.

Yet again, Financial Services Minister Kelly O’Dwyer ruled out holding a royal commission, claiming amongst other things that it would damage the banks’ reputation and put Australia’s AAA credit rating at risk:

Ms O’Dwyer remarked that Mr Robb had been a great trade minister but on this issue, he was “profoundly wrong”…

She said in the current febrile political environment “oppositions will make wild claims” and “we must govern in the national interests, not just the political interest”.

For its part, The Greens are pushing for a parliamentary Commission of Inquiry into banks, rather than a royal commission and will present draft legislation and terms of reference to cross-party MPs today.

A Commission of Inquiry is the same thing as a Royal Commission with two slight differences:

  1. Royal Commissions are set up by the executive Government whereas a Commission of Inquiry can be set up by the Parliament.
  2. Royal Commissions report to the executive Government whereas a Commission of Inquiry reports to the Parliament.

With Labor, The Greens, Bob Katter and George Christensen all likely to support a Commission of Inquiry, only one more Coalition MP will need to cross the floor to make it happen.

The Turnbull Government is struggling to hold back the tide.

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Comments

  1. proofreadersMEMBER

    Would a parliament-initiated Commission of Inquiry be “truly” independent?

    Also, it sounds like Robb would want any inquiry to just go through the motions by having limited terms of reference?

    While we’re at it, why not spend some well-invested money on inquiring in to those trade deals that Straya has done?

    • “Minister, two basic rules of government: Never look into anything you don’t have to. And never set up an enquiry unless you know in advance what its findings will be.” – Sir Humphrey.

      Pressure builds? It would be like lancing a boil. I am tormented by an image of Narev’s bald noggin covered in puss.

      • Just about the perfect quote Auld, thanks: it certainly grabs the level of cynicism shown by Mr Robb’s want for a quick and limited enquiry. But Ms Kelly’s concern that any sort of banking enquiry would cost us our Triple A rating suggests that she at least already knows what the findings will be.

  2. “Kelly O’Dwyer ruled out holding a royal commission, claiming amongst other things that it would damage the banks’ reputation and put Australia’s AAA credit rating at risk:”

    This just says it all. If the banks are doing the right thing, on a mostly consistent basis they would not have to worry about reputation damage. Very very easy to hide things in the books when you are announcing record multi billion dollar profits.

    • I liken her stance to, “I’ve got nothing to hide, but I’m also not going to give you permission to look at my internet browsing history…”

    • By saying this O’Dwyer is openly admitting that the banks cannot withstand any scrutiny.

      This simply confirms how desperately a RC into the banks is needed.

      If there is any sort of global/local economic downturn our banks will not be able to withstand it and needs to fixed now, before the shit hits the fan. If something like an RC can trigger the collapse in confidence, then its a lot worse than we currently think.

  3. adelaide_economist

    “we must govern in the national interests, not just the political interest”

    This is O’Dwyer (remember: she’s apparently one of the Liberals bright up and coming stars) at her best. Laughable commentary that fails the pub test (or indeed, any test at all). When she’s not struggling to remember what the party’s spin on negative gearing and capital gains tax is she’s giving us this sort of blatantly false fluff. National interests? The only thing that seems able to get our politicians in an uproar is touching their gold passes. Everything else is fine and just needs better messaging.

  4. “Put Australia’s credit rating at risk”????
    That would mean that Kelly O’Dwyer suspects that there is significant mismanaged risk within the Australian banks that, if revealed, would cause the ratings agencies to re-assess their rating and because the banks and the government are inextricably linked, the Federal government risk rating would also be impacted. Either that, or she is setting up another excuse for why the AAA rating will be lost.

    The banks cosy relationship with the Liberal and Labour parties is another example of why people are turning to the “populist” parties. People can see it everywhere; from the ridiculous continuation of negative gearing, the attack on industry superfunds, the lack of prosecutions from ASIC, the lack of a royal commission, the lack of support for financial institutions outside the big four, the desire to boost banks profits with a company tax cut.

  5. Mining BoganMEMBER

    Commissioner : Banks, have you been operating correctly and honestly?
    Banks : Why, of course.
    Commissioner : Roger. That’s all settled. Off we go then. Who’s shout? Oh, bugger it, we’ll just bang it on the inquiry’s tab.

  6. “With Labor, The Greens, Bob Katter and George Christensen all likely to support a Commission of Inquiry, only one more Coalition MP will need to cross the floor to make it happen.”

    I wonder if the ALP will support it as they’ve been pushing for Royal Commission instead. That is they won’t be able to claim any political points if it’s not their idea whereas the govt can consistently decry the whole thing as a political stunt.