How the seeds were sown for a re­ces­sion in next few years

The Weekend Australian - - BUSINESS REVIEW - ALAN KOHLER

If there’s a re­ces­sion in Aus­tralia in 2019 or 2020, or if it feels like one, the causes will be trace­able back to two things that hap­pened in 2014: the rec­om­men­da­tion from the Sen­ate Eco­nom­ics Ref­er­ences Com­mit­tee for a royal com­mis­sion into fi­nan­cial ser­vices and the fi­nal re­port of Mur­ray In­quiry.

The first oc­curred in June that year, and was prompted by the ABC’s Four Cor­ners pro­gram on May 5, called “Bank­ing Bad”, which ex­posed the cor­rupt sales cul­ture within Com­mon­wealth Bank’s fi­nan­cial plan­ning divi­sion. The Mur­ray re­port landed on Sun­day, De­cem­ber 7.

It’s a bit hard to de­cide which was more im­por­tant, but I think the im­pact of the Fi­nan­cial Sys­tem In­quiry chaired by David Mur­ray on to­day’s econ­omy has been greater than the royal com­mis­sion — just.

The royal com­mis­sion has had a pow­er­ful eco­nomic im­pact, no doubt. Royal com­mis­sioner Ken Hayne’s fi­nal re­port is due in a few weeks, but most of his im­pact has al­ready hap­pened: the banks have been justly bru­talised, their con­fi­dence shat­tered and, im­por­tantly, their ad­her­ence to the

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