The Federal Opposition has revealed the degree to which a future Labor Government might alter the terms of reference of the Royal Commission into the Banking and Financial Services industry to dig more deeply into the shortcomings of the banks and the financial services sector.
The Opposition’s agenda has been outlined in the dissenting report of the Labor members of the House of Representatives Economics Committee which undertook the Review of the Four Major Banks and which filed its final report just hours before the Parliament rose for its summer recess last week.
The dissenting report of the Labor members of the committee urged both the inclusion of more commissioners and an extension of the terms of reference to enable deeper investigation into the banks.
It recommended that the Government extend the terms of reference for the Royal Commission to include matters that Labor has been calling for including;
- Culture of the banks and executive remuneration.
- Consultation with banking victims’ groups.
- Protections for whistle-blowers.
- Regulation or oversight and the overall regulatory architecture.
- Conduct of liquidators where this relates to the financial services sector.
- Remove the draft term ‘And, the Commission may choose not to inquire into certain matters otherwise within the scope of this Inquiry, but any such decision will be the Commission’s, alone.’
The Labor members’ dissenting report claimed that the third hearing of the Bank CEOs had “once again proved the farcical nature of these hearings that allow only 10 to 20 minutes each to question the most powerful executives in the country”.
“Each time the CEOs appear before the Committee it reinforces the need for a Royal Commission into banking in Australia. This is exactly what has happened,” the report said.
“Since the beginning of this process over a year ago it has been clear that the House of Representatives Liberal Government dominated Economics committee was being used as a vehicle for the Turnbull Government to avoid the scrutiny of a Royal Commission,” it said. “Again and again the Labor members pointed out the futility of this exercise and have questioned how the banks were preparing for a Royal Commission.”
The dissenting report said Labor members of the committee had been vindicated as the Turnbull Government had agreed to conduct a Royal Commission at the request of the Banks themselves.
“The letter from the banks to the Prime Minister clearly indicates that the banks themselves knew a Royal Commission was inevitable and have been preparing for one for some time,” it said.
