PM banks on backflip
Turnbull caves in on $75m royal commission
A ROYAL commission into Australia’s banking sector will be launched after the Big Four themselves called for a “properly constituted inquiry”.
In a major backflip yesterday, Malcolm Turnbull announced the $75 million inquiry saying speculation about the commission was moving into “dangerous territory” that was putting the banking sector and the Australian economy at risk.
“The speculation about an inquiry cannot go on,” Prime Minister Turnbull told reporters in Canberra.
“It’s moving into dangerous territory where some of the proposals being put forward have the potential, seriously, to damage some of our most important institutions.
“We have got to stop the banks and our financial services sector being used as a political football.”
Mr Turnbull’s announcement comes after the chief executives of the Commonwealth, Westpac, National Australia and ANZ banks requested the government launch an inquiry in an email sent to Treasurer Scott Morrison on Wednesday. The letter was released by each bank in an ASX release yesterday.
“It is now in the national interest for the political uncertainty to end,” the chief executives said.
“It is hurting confidence in our financial services system, including in offshore markets, and has diminished trust and respect for our sector and people. It also risks undermining the critical perception that our banks are unquestionably strong.”
The PM’s announcement comes just two days after he again ruled out a Royal Commission.
“We have made it clear that we are not going to establish a Royal Commission and the reason for that is simply because we want to get on with the job now,” he then said.
“If we had set up a Royal Commission into banks two years ago, none of the reforms that we have undertaken would have been able to be achieved.”
His announcement scuppers the threat of a revolt from Nationals senators, who were planning to launch a bid in Parliament for a royal commission with support from Labor and the Greens.
Acting Nationals leader Nigel Scullion said the commission became necessary to restore confidence in the banking sector “following years of concerns”.