Banks face probe after PM backflip
DODGY bankers and financial advisers who have ripped off Australian families and businesses will be investigated in a year-long royal commission after a stunning U-turn by Malcolm Turnbull.
The $75 million commission was announced by the Prime Minister minutes after the big four banks, in an extraordinary reversal of their own, called on him to set up an inquiry into their operations.
Mr Turnbull and Treasurer Scott Morrison had resisted Labor’s push for a royal commission for more than 18 months, attacking it as a “law- yers’ picnic” that would do nothing to help victims.
But the Government’s hand was forced as Nationals MPs threatened to cross the floor next week to vote with Labor for a banking inquiry.
Shares in the big banks tumbled yesterday as Queensland MP George Christensen said Mr Turnbull had been dragged “kicking and screaming” into the policy reversal, which the Prime Minister said was “regrettable” but necessary to end “dangerous” economic uncertainty.
New Corp has been told Liberal MPs approached the Prime Minister months ago and urged him to reconsider the Government’s position on establishing a royal commission.
But Mr Morrison had remained the roadblock and it is understood he only shifted his stance in the past few days.
Opposition Leader Bill Shorten said the Government’s about-face was “one of Malcolm Turnbull’s greatest failures of leadership”.
“He ignored the pleas of families and small businesses, he rejected the words of whistleblowers. But when the big banks wrote him a letter, he folded the same day,” Mr Shorten said.
Australian Bankers’ Association chief Anna Bligh said the commission was “unnecessary and unwarranted” and warned it could result in higher mortgage rates.
The commission, which will have broad investigative powers, will focus on misconduct in the banking, financial services and superannuation industries, while also considering how they are regulated and governed.
But Mr Turnbull said it would not have the power to pay compensation to victims, and instead could only make recommendations, with a reporting date of February 2019.
He admitted the “circumstances in the Parliament” — the Government has lost its majority without Barnaby Joyce and John Alexander — forced the policy reversal.