NATION Penalty rates revolt looms

A WEAKENED Malcolm Turnbull is facing a new, damaging inside attack – this time on penalty rates – after he was forced to own a “regrettable” year- long royal commission on banking misconduct that he argued against just days ago.

As the Prime Minister and the Treasurer yesterday begrudgingly announced a banking blowtorch would report to the Government in the lead- up to the next election, Labor tacticians war- gamed plans to hijack a Government Bill in a bid to undo penalty rate cuts and entice rogue MP George Christensen to cross the floor.

Highly placed sources said the Government was aware of Labor’s tactics and legitimately feared it would again be held hostage by some of those emboldened in the Nationals party “with pet issues”.

The $ 75 million, broad- ranging royal commission will probe banking, superannuation and financial service advisers and provide an interim report to the Government no later than September next year and with a final reporting date of February 1, 2019.

Banks, which wrote to the Government yesterday to ask the executive to take control of the inquiry and ease uncertainty in the sector, took a hit on the sharemarket yesterday after the announcement.

Ironically after the SOS, Australian Bankers Association chief executive Anna Bligh warned families could face interest rate rises because offshore lenders would likely price in risk.

The ostensible urging from the banks gave Mr Turnbull some political cover needed for his backflip, but it was clear the Government capitulated to three Queensland Nationals – Queensland Senator Barry O’Sullivan, Wide Bay MP Llew O’Brien and Mr Christensen – threatening to pull the trigger on a private member’s Bill to set- up a probe.

The royal commission’s focus will be “the nature, extent and effect of misconduct by a financial services entity ( including by its directors, officers or employees, or by anyone acting on its behalf)”.

It will also consider whether laws are strong enough to protect consumers, some who have horror stories about losing their life savings or business because of reckless or negligent financial advice or unfair loopholes.

However, the royal commission will not have the power to award compensation to victims but will have the authority to compel witnesses to testify and offer whistleblower protection.

A current or former judge – with no shares in the banking industry – will be announced next week to head the royal commission.