Finance Consumer Government hits pause on banking royal commission reforms

Government hits pause on banking royal commission reforms

Treasury has granted financial institutions a six month delay on some reform initiatives arising from the banking royal commission.
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Banks and financial services institutions have been granted a reprieve from banking royal commission recommendations amid the coronavirus pandemic.

Treasurer Josh Frydenberg said on Friday the industry had been granted six-month deferral to give it breathing space to focus its energy on “planning for the recovery and supporting their customers and their staff” during the COVID-19 outbreak.

The reprieve means reforms initially meant to come into effect in December will be delayed until June 30, 2021.

Mr Frydenberg said the delay would help businesses with the virus recovery. Photo: AAP

“This announcement today balances the need to implement the recommendations of the royal commission with the need to ensure our financial institutions are in a position to devote their resources to responding to the significant challenges posed by the coronavirus,” Mr Frydenberg said.

“The changes will also provide certainty and clarity to all stakeholders about the government’s commitment to implementing the recommendations arising out of the royal commission.”

Consumer groups welcome short delay

Consumer Action Law Centre chief executive Gerard Brody told The New Daily the deferral was, unfortunately, inevitable.

But he was pleased the federal government had not dragged out the delay.

“The Treasurer has been clear today that the government has recommitted to these reforms, and I expect that they’ll stick to that,” he said.

“We wrote to government back in April acknowledging a delay would be needed, but saying it should be no more than six months.

“It’s good to see they’ve recognised that and are staying true to their commitments.”

Consumer advocacy group CHOICE also welcomed the announcement.

Chief executive Alan Kirkland commended the Morrison government’s continued commitment to introducing reform once the social and economic pressure of the coronavirus begins to subside.

“A six-month deferral strikes a sensible balance between recognising the reality of these unprecedented circumstances and the need to legislate reforms to protect consumers, who will need this even more in the coming months,” he said.  

“We look forward to working with the government to finalise the remaining reforms as soon as possible.”