The bosses of Australia’s biggest banks have dismissed Labor’s call for a royal commission into the financial sector as the Federal Government rules out launching its own.
Opposition Leader Bill Shorten has vowed to hold a two-year, $53 million probe if elected, saying a “string of scandals” proved it was vital.
But National Australia Bank chief executive Andrew Thorburn dubbed the move a “serious distraction”, saying there had been about 10 investigations into the sector since the global financial crisis.
“However… if the government of the day decides that a royal commission is needed, then it will have our full co-operation,” Mr Thorburn said.
What is a royal commission?
Bill Shorten says an incoming Labor government would hold a royal commission into misconduct in the banking industry. We look at the role of royal commissions and what would likely be involved.
ANZ chief executive Shayne Elliott also said there had been a number of recent inquiries into the industry and a royal commission could damage Australia’s standing among global investors.
“I understand the politics and that attraction for many people to think that such a commission or investigation is a good idea,” Mr Elliott said.
“It has the potential to harm Australia’s reputation because international investors will be thinking where there is smoke there is fire and what exactly are we investigating here?”
A Westpac spokesman said the community had the right to expect high standards from banks and all banking executives, but the bank did not support a royal commission.
“[The] announcement sends confusing messages about the strength of Australia’s financial system and this could impact confidence in the economy.”
Government rejects royal commission, despite backbench support
The Federal Government has ruled out calling a royal commission into the banking and financial sectors with Environment Minister Greg Hunt saying the corporate regulator, the Australian Securities and Investments Commission (ASIC), was already a potent authority.
“We’ve got a standing equivalent of a royal commission with the powers of a royal commission and … in some circumstances even greater powers than a royal commission; the ability to compel witnesses, to call witnesses to hold them under oath,” Mr Hunt said.
“If there’s any evidence that Mr Shorten has he shouldn’t withhold it — he should release the evidence immediately, provide it to ASIC.”
Christensen attacks banks’ treatment of farmers
However, Queensland Nationals MP George Christensen said a royal commission is needed, slamming the banks’ treatment of farmers.
“For far too long, they have screwed over farmers and small business operators, and dodgy practices by their in-house financial advisers have led to misery and financial ruin for many mum and dad investors,” he said on Facebook.
“I have been a supporter of such a royal commission in the past and will continue to be strident about the need for it in the next parliament.”
NSW Nationals senator John Williams and Liberal MP Warren Entsch have backed calls for a royal commission.
“There are a lot of victims out there who have been absolutely devastated, economically destroyed, because [of] what I can see is nothing better than bastard practices of these big banks,” Mr Entsch told the ABC.
Banking inquiry ‘above politics’: Labor
The financial and banking sectors have been rocked by controversies in recent years.
The Commonwealth Bank’s financial planning and insurance arms have been accused of wrongdoing, while the Australian Securities and Investments Commission (ASIC) dragged ANZ and Westpac to court over alleged inter-bank interest rate rigging — accusations both banks deny.
Labor senators last year voted against a similar commission proposed by the Greens, but opposition financial services spokesman Jim Chalmers denied Friday’s announcement was a political manoeuvre.
“This is more fundamental than political game playing or political judgements that some people have made including the Government,” Mr Chalmers said.
“This is really about one of the most important sectors in the Australian economy, and even more important than that, the way that Australians are treated within that part of the economy. I think it should be above politics.”