Daily Bulletin


The Conversation

  • Written by The Conversation Contributor

Opposition Leader Bill Shorten has promised a Labor government would set up a royal commission into misconduct in the banking and financial services industry.

Shorten said public confidence in the sector had taken “hit after hit” in recent years, which have seen a string of revelations about bad behaviour.

“Many Australians have suffered through the decisions of banks and financial institutions,” he said. Retirees had lost their savings, small businesses had lost their livelihood, families had lost hundreds of thousands of dollars and insurance beneficiaries had been denied justice and legitimate claims.

“There are literally tens of thousands of victims, if not more. And today I say enough is enough. This string of scandals has to stop.”

Shorten called on the government to establish a royal commission, but said that if it would not act, a Labor government would.

Prime Minister Malcolm Turnbull this week strongly lectured bankers on the need for improved ethics but the government has ruled out a royal commission.

Earlier on Friday Treasurer Scott Morrison accused Shorten of engaging in a “reckless distraction” that put at risk confidence in the banking system. “What sort of message do you think Bill Shorten saying there needs to be a royal commission into the banks sends to the international community about confidence in the Australian banking system?”

Morrison said Shorten was seeking to “distract attention from his defence of corrupt practices in the building and construction industry”. There was already a “tough cop on the beat” to address the issues in the finance sector, Morrison said.

Shadow Treasurer Chris Bowen said the royal commission would look at:

  • how widespread instances of illegal and unethical behaviour were in the industry;

  • how the financial services industry institutions understood and gave effect to their duty of care to consumers;

  • how the culture, ethical standards and business structures of Australia’s financial institutions affected the behaviour of their employees and their operation in financial markets;

  • whether Australia’s regulators were well equipped the identify and prevent illegal and unethical behaviour in the sector, compared with experiences overseas; and

  • any other issues that came to light during the inquiry.

Detailed terms of reference would be drawn up in government. The inquiry had been costed at A$53 million over two years, Bowen said.

The inquiry would cover banks, insurance providers, and superannuation funds, but Bowen made it clear it would not be an inquiry into broader corporate Australia.

Asked whether this was tit for tat after the trade union royal commission, Shorten said: “No, this is a much bigger issue than some of those matters in terms of industrial relations.”

Among those calling for a royal commission have been two government backbenchers, John Williams and Warren Entsch.

Speaking shortly before Labor’s announcement, Williams told Sky he thought a royal commission would eventually come and he hoped it came sooner rather than later.

Immigration Minister Peter Dutton said “a stunt a day” until the election could now be expected from Shorten.

Australian Bankers' Association chief executive Steven Münchenberg said Labor had failed to explain what a royal commission would add, above and beyond what was being done to address the problems that had occurred. Many of the incidents had occurred a number of years ago, and since then a lot of regulation had been added.

Münchenberg said international investors were going to be asking what was wrong with the Australian banking system that required a royal commission.

ACTU secretary Dave Oliver said the banking and financial sector “has lurched from scandal to scandal, eroding public confidence in what should be the foundation of all economic activity in this country.

“There is mounting evidence of systemic corruption, poor governance and a lack of accountability” in the sector. “A royal commission would get to the bottom of those issues and renew trust,” Oliver said.

Business Council of Australia chief executive Jennifer Westacott said setting up a royal commission when there was already robust regulatory oversight “risks undermining confidence at a critical time in the economic cycle, and could have a serious impact on investment and growth”.

“While the culture in some parts of the industry needs to be improved, we should be extraordinarily cautious about overstating the nature or extent of poor conduct in a way that implies systemic failure across the sector,“ she said.

Authors: The Conversation Contributor

Read more http://theconversation.com/labor-pledges-royal-commission-into-bank-behaviour-57490

Writers Wanted

Body fat deep below the surface is a toxic risk, especially for your heart

arrow_forward

The Future of Online Gambling in Australia

arrow_forward

The Conversation
INTERWEBS DIGITAL AGENCY

Politics

Did BLM Really Change the US Police Work?

The Black Lives Matter (BLM) movement has proven that the power of the state rests in the hands of the people it governs. Following the death of 46-year-old black American George Floyd in a case of ...

a Guest Writer - avatar a Guest Writer

Scott Morrison: the right man at the right time

Australia is not at war with another nation or ideology in August 2020 but the nation is in conflict. There are serious threats from China and there are many challenges flowing from the pandemic tha...

Greg Rogers - avatar Greg Rogers

Prime Minister National Cabinet Statement

The National Cabinet met today to discuss Australia’s COVID-19 response, the Victoria outbreak, easing restrictions, helping Australians prepare to go back to work in a COVID-safe environment an...

Scott Morrison - avatar Scott Morrison

Business News

5 Essential Tools for Working Remotely in 2020

The average, modern office worker spends 8 hours a day, 5 days a week in a company building. Since the start of COVID, however, many of these companies have allowed workers to work from home due...

News Company - avatar News Company

What happens to all those pallets?

Pallets — they're not something everyday people often give much thought to. But they're an integral part of any business which receives or distributes large quantities of goods. But once the goo...

News Company - avatar News Company

Ten tips for landing a freelance transcription job

Transcription jobs are known to be popular in the field of freelancing. They offer fantastic job opportunities to a lot of people, but there are some scammers who wait to cheat the freelancers. ...

News Company - avatar News Company



News Company Media Core

Content & Technology Connecting Global Audiences

More Information - Less Opinion