The Federal Opposition’s calls for a Royal Commission into the banking industry represents a continuation of a campaign started by industry funds nearly three years ago, Mike Taylor writes.
As Australia moves further into election mode and as the major political parties define the battleground, it is worth noting the Australian Labor Party's calls for a Royal Commission into the banking and financial services industry.
Sitting at the centre of the ALP's Royal Commission calls are the various issues which have confronted the Commonwealth Bank, Macquarie Bank, ANZ and the National Australia Bank, albeit that not all of the allegations which have been raised have, thus far, been either substantiated or finalised.
What we do know, however, is that the Commonwealth Bank has been the subject of intense scrutiny and has put in place a comprehensive remediation process with respect to its financial advice businesses, while its insurance arm, CommInsure earlier this month announced a review process with respect to the controversy which has erupted around its claims handling procedures.
What is notable with respect to the processes within the Commonwealth Bank is that, publicly at least, no significant heads have rolled. Planners have certainly been sacked and or pursued/prosecuted by the Australian Securities and Investments Commission (ASIC), but no significant senior executives appear to have been either disciplined or dismissed. Perhaps the Commonwealth Bank board has discerned no reason why they should be.
But no one should be particularly surprised by the Federal Opposition's calls for a Royal Commission into the banking and financial services industry. It represents a continuation of a theme pursued by the industry funds movement almost from the very day the Coalition Government gained office and began looking to prosecute its agenda of changing elements of the Future of Financial Advice legislation while imposing new governance standards on superannuation fund boards.
Any review of media statements issued by Industry Super Australia (ISA) will reveal frequent references to the agendas being pursued by the big banks and the media coverage of financial planning failings within Commonwealth Financial Planning, Macquarie Bank, National Australia Bank and elsewhere only served to give impetus to that message.
But what should not be overlooked in the debate around a Royal Commission is that much of the ground which might be covered by such an inquiry has already been traversed by the activities of Parliamentary Committees and punitive action has already been pursued by the Australian Securities and Investments Commission (ASIC).
Is there more to find? Quite possibly, but is the cost of a Royal Commission warranted with respect to what might ultimately prove to be nothing more nor less than a fishing expedition seeking to find shortcomings not already identified by whistle-blowers or the oversight activities of ASIC.
In the greater scheme of things, the political pragmatists know that neither the future of the Australian Building or Construction Commission nor the shortcomings of the banks will be decisive factors in determining the outcome of election 2016.