Treasury secretary, Phil Gaetjens, has reportedly set up a task force to help the federal government respond to the recommendations raised by the banking royal commission:
Secretary Phil Gaetjens told a Senate estimates hearing that Treasury recently created the task force to help the government deal with the serious problems raised in the interim report, released last month.
“It is clear that once the royal commission hands down its final report, due by the first of February, that there will be more work to do,” he told the hearing in Canberra on Wednesday.
But can we trust the Treasury to do the right thing and implement the commission’s recommendations? I am highly sceptical, given the Treasury and RBA recently said the following:
The Reserve Bank of Australia and Treasury have privately cautioned the Morrison government that any regulatory response to the financial services Royal Commission must be careful to avoid putting the brakes on lending to home buyers and business.
And reiterated it today:
Treasury secretary Philip Gaetjens has warned that a key risk to Australia’s strong economy is banks cutting their lending too much in response to the Royal Commission into financial services and tougher credit rules imposed by the prudential regulator.
Amid complaints from small business and home buyers that they are finding it harder to attain finance, Mr Gaetjens said a tightening of credit conditions could constrain household consumption and business investment.
These institutions are no longer managing the economy, but rather managing the bubble. Hence, expect them to throw the royal commission’s recommendations to the wolves in a bid to keep the bubble alive.
