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