Christensen threats push reluctant Turnbull into path of banking inquiry
There are a number of moving parts with the proposed commission of inquiry into the banks, so it might be helpful at this juncture to unpack the various drivers of the debate.
Let’s start with the voters, because that’s the simplest part of the story. The Guardian Essential poll indicates a majority of Australians have wanted a royal commission into the banks for two years. Public support has remained constant as the political debate in Canberra has waxed and waned.
Now, let’s turn our eyes to the parliament, and the various protagonists.
Labor has been on about a royal commission into the banks for years, but the notion of pursuing a commission of inquiry was first floated by the Greens senator Peter Whish Wilson in 2016.
The Greens were advised by the Senate clerk that parliament could establish an inquiry in the event the government of the day refused to play ball with a banking royal commission, using a precedent established in 1986 when an inquiry was opened into the high court judge, Lionel Murphy.
Since then, it has been a matter of parliamentary numbers, and events.
The Nationals face sustained and specific constituency pressures about banks behaving badly, with the New South Wales senator John “Wacka” Williams – an early campaigner on this subject – a helpful barometer of that local political pressure.
For some time, the government has worked to neutralise pressure within its own ranks for a major probe into the banks, undertaking various practical actions, and the Nationals have largely fallen into line with that effort.
But a couple of things have changed in recent times.
Let’s call the first one Grexit. Some Nationals believe their inhouse dissident, George Christensen, has been preparing to part company with the government, using the lack of support for a banking inquiry as the trigger point to go full outsider.
In circumstances where the Turnbull government’s lower house majority was assured, you might say go away George, and good riddance to your theatrics, but no one can afford that luxury right at the moment.
It’s a risk that needs to be managed. One way to manage the risk would involve removing the trigger point.
There’s two ways to do that. The first would involve shifting the official position of the National party to one of support for a commission of inquiry – a switch the party’s leader in absentia, Barnaby Joyce, floated on Monday. The second option would be no official shift, but no obstacles in the path of the dissenters – no attempt to impose internal discipline.
Sticking with Queensland dissenters, there’s the role of Queensland senator Barry O’Sullivan, who has crafted the private member’s bill which is the basis of the current rebellion.
O’Sullivan has had the same traffic through his office as Williams on bank behaviour since entering politics in 2014.
Once the Liberal senator Dean Smith chalked up the tactical success of projecting his private member’s bill legalising same-sex marriage on to the political agenda, O’Sullivan took the view there wouldn’t be one rule for Liberals and another for Nationals. Given Nationals MPs face consistent constituent pressure about bank behaviour, he reasoned the Nationals could follow exactly the same playbook when it came to pursuing private members’ business – capitalise on a pre-existing cross-party consensus to get practical outcomes.
So given a serious push is on, the government is now faced with a political choice: if the rebellion is going to succeed, do you end the resistance and roll along with it, rendering it a backflip™ and not a rebellion™?
Or you hold firm and let the Nationals have their little bit of product differentiation™ (which, ironically, is less about product differentiation and more about concerted effort to keep the government from splintering at a critical moment)?
But these aren’t the only complexities.
While this commission of inquiry is now being written up around the traps as a certainty, the Greens (who set this particular ball rolling) aren’t entirely on the same page as O’Sullivan concerning the terms of reference.
They want a more wide-ranging inquiry than the Nationals, including issues such as executive remuneration, political donations and the bank guarantee.
Apart from this problem, there are two other issues.
In the event the current dispute is resolved and the inquiry goes ahead, will the banks seek to challenge it on the basis that the inquiry is invalid?
When the clerk of the Senate advised the Greens the inquiry was an option, she also advised there were significant risks of litigation, noting that “costly interference could be run by interests opposed to such an inquiry”.
Someone also has to fund this inquiry. That last time such an inquiry proceeded, in 1986, the government funded it. If the Liberals remain opposed to the inquiry – who funds it?
Then there is also the question of precedents. While no one is taking any political risk by setting up a probe into the banks, this precedent provides an option for future parliaments to collaborate to upend the elected government’s priorities whenever numbers are tight.
By establishing this as a valid course of action, you open up future consequences – particularly in an environment where Australian voters are sufficiently browned off to not care much about the consequences of a protest vote depriving major parties of a clear working majority.