News National Push for banking royal commission to be given more time

Push for banking royal commission to be given more time

ASIC given news powers to police the big four banks
Only 27 financial victims have testified so far. Photo: Getty
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Labor is demanding that Prime Minister Scott Morrison extend the banking royal commission, after it handed down a scathing report that slammed the big banks for their greed.

The opposition is concerned that only 27 victims had their voices heard, out of more than 9000 submissions.

“This is a crucial national issue, and we want the royal commission’s report not just to sit in the top drawer, but be a roadmap for reform,” Labor’s financial services spokeswoman Clare O’Neil told reporters on Sunday.

“In order to make that happen, the royal commission needs to be given more time.”

Commissioner Kenneth Hayne released a scathing, 1000-page interim report on Friday that accused the banks of greed.

“Why did this happen? Too often, the answer seems to be greed – the pursuit of short-term profit at the expense of basic standards of honesty,” he wrote.

“How else is charging continuing advice fees to the dead to be explained?”

Since the first round of hearings in March, the commission heard case after case of misconduct, predominantly among the nation’s biggest banks and wealth managers.

These included the charging of fees to dead people, as well as deliberate charging of fees for no service, spruiking of expensive and unnecessary insurance products to vulnerable people, pressuring rural businesses to take on loans they could not afford simply so that the bankers could collect bonuses, and of banks and financial services companies lying to the regulator.

“Banks, and all financial services entities recognised that they sold services and products. Selling became their focus of attention. Too often it became the sole focus of attention,” Commissioner Hayne wrote.

“Products and services multiplied. Banks searched for their ‘share of the customer’s wallet’. From the executive suite to the front line, staff were measured and rewarded by reference to profit and sales.”

The Commissioner also took aim at regulators for cosying up to financial services firms and striking limp deals in response to systemic misbehaviour rather than pursuing tough prosecutions.

“The conduct regulator, ASIC, rarely went to court to seek public denunciation of and punishment for misconduct. The prudential regulator, APRA, never went to court,” he wrote.

“Much more often than not, when misconduct was revealed, little happened beyond apology from the entity, a drawn-out remediation program and protracted negotiation with ASIC of a media release, an infringement notice, or an enforceable undertaking that acknowledged no more than that ASIC had reasonable ‘concerns’ about the entity’s conduct.”

But Mr Hayne made it clear he did not want more time, as he feared “prolonged injections of doubt and uncertainty” could hurt the Australian financial system.

“Therefore, I must execute my tasks promptly,” he wrote in the report.

Ms O’Neil said Labor had not contacted the Commissioner to ask if he wanted more time, but that it was “clear” he needed it.

“He is going to need more time to provide thoughtful, serious and significant recommendations for a sector we have been told is permeated by a culture of greed,” she said.

Prime Minister Scott Morrison said the Royal Commissioner would “absolutely” be given more time, but only if he requested it.

“I don’t want politics to drive this. The Royal Commissioner is in charge of the royal commission. And if the Royal Commissioner needs further time then they will get it,” he told the ABC on Sunday.

The commission will hold one further round of public hearings in November to look at the policy questions that will be dealt with in his final report, due by February 1.

Any further time allocated to the commission may push the final report beyond the next federal election, which is due by May 18.

Ms O’Neil said the election date was “irrelevant”.

“The election date shouldn’t be the thing that dictates when the royal commission makes its findings,” she said.

“Our focus here is making sure that we have a roadmap for reform so that the culture of greed that permeates financial services in this country can be properly cleaned up.”

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