Labor has moved a motion to introduce a banking royal commission in an attempt to derail the government’s agenda on the first substantive day of parliament since the election.
But the government has shut the move down, pointing to a new inquiry into small business lending practices and other reforms to argue the royal commission is not needed.
Bill Shorten, the opposition leader, on Wednesday sought a suspension of standing orders in the lower house to call for a royal commission. The motion was seconded by independent MP Bob Katter.
Shorten said that scandals in the banking and financial services industry have gutted retirees’ savings, “rorted” families and resulted in life insurance policy holders being denied justice.
He cited examples including allegations of rate-fixing in the banking sector and insurance policies being denied for “having the wrong type of heart attack”.
“Despite several inquiries, new powers, new resources, and a financial ombudsman service, the rorts and the rip offs continue.”
Kelly O’Dwyer, the minister for revenue and financial services, announced on Wednesday the government has asked the Australian small business and family enterprise ombudsman to look at how banks treat their small business lending customers.
The ombudsman will report within 12 weeks and provide interim findings to the Ramsay review examining external dispute resolution schemes in the financial services sector.
The government shut down Labor’s call for a royal commission, successfully amending the motion to instead question why Labor had not instituted an inquiry when it was in government.
Coalition MP George Christensen, formerly an advocate for a bank royal commission, moved the motion.
He noted the Ramsay review – led by corporate law expert Professor Ian Ramsay – was under way and that the Australian Securities and Investment Commission had commenced prosecutions on the rate-rigging allegations.
Christensen pointed to government initiatives including increasing the resources of Asic and a new process to haul banks before a parliamentary committee to explain failing to pass on interest rate cuts.
“If a royal commission were to go ahead it would simply be reviewing old ground,” he said.
The leader of the opposition proposed areas of focus for the commission, including consideration of how widespread unethical behaviour is, financial institutions’ duty of care, and whether regulators are equipped to prevent illegal and unethical behaviour.
Shorten said the breadth and scope of the allegations showed problems in the industry “go beyond any one bank, type of financial institution or group of receivers”.
He accused the government of running a “protection racket” by refusing opposition demands for a royal commission.
“You can take Malcolm Turnbull out of the investment bank, but you can’t take the investment banker out of Malcolm Turnbull,” he said, referring to the prime minister’s former career in finance.
Shorten said Labor, the Greens, crossbench, and at least eight Liberal and National parliamentarians had supported a royal commission.
But the appetite for a royal commission is waning amongst some of those Coalition MPs, with Warren Entsch, previously a fierce advocate, now proposing a bank victim compensation tribunal instead.
On 16 August Katter blasted Entsch for the back-flip, accusing him of “dogging it” and pleading with him to back a royal commission.
Shorten said a royal commission “is the only forum with the coercive powers and broad jurisdiction necessary to properly perform this investigation”.
He invited Turnbull to meet with the victims of banking and financial scandals.
This article was written by Paul Karp, for theguardian.com on Wednesday 31st August 2016 02.18 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010
Have something to tell us about this article?