Success has many fathers, but the real heroes of the Banking Royal Commission should be recognised, writes Mark Hipgrave.
MUCH HAS BEEN REVEALED in the Financial Services Royal Commission since it kicked off earlier this year.
And there is still a long way to go, with a final report to be issued and the possibility of criminal charges levelled at some of the key players.
Nevertheless, it was bittersweet to open the Financial Review on 3 August and see a story on the front page telling us that Treasurer Scott Morrison was about to ‘deliver a harsh reprimand’ to the banks for exploiting customer loyalty. And then, on page 2, a full page advert from the Australian Banking Association announcing, in big, bold blue capitals, ‘A new banking code of practice for Australia’. Then, The Australian, on 4 August, told us in a front-page headline: ‘PM backs new clamp on banks’.
It’s great that our leaders are front and centre in keeping the banks honest and under control. But it wasn’t always so.
It’s a political maxim trotted out every time a Royal Commission is mooted that politicians should never call a royal commission unless they know the outcome in advance.
The truth of this was demonstrated in March, in Richard Fidler’s ABC Radio Conversations program with "Jack the Insider", Peter Hoysted. The topic was Victoria’s Painters and Dockers Union and Jack recounted how, in 1980, PM Malcolm Fraser called a Royal Commission into the Union without understanding, or thinking through, the unintended consequences.
The Costigan Commission (as it became known) did indeed find lots of evidence of illegal behaviour by the union and its officials, some of whom were career criminals who had never picked up a paintbrush or set foot on a dock.
But it also uncovered the "bottom of the harbour" tax avoidance schemes, which brought lots of angst and even a few gaol terms to the top end of town. It also raised more than a few hints of illegal behaviour by a character known as "the Goanna", who was thought to be the late Kerry Packer.
Malcolm Turnbull was well aware of this First Law of Royal Commissions and, as a former banker, must have been pretty sure what it might uncover when he fiercely resisted the calls for a royal commission into the banking industry.
Tame parrot and Treasurer Scott Morrison told us in 2016 that ASIC was a "tough cop on the beat" and "has the powers of a Royal Commission and, in fact, it has greater powers than a Royal Commission". ASIC was onto it and so no royal commission was necessary.
This resistance continued right through 2016 and 2017.
With his eye on the 2019 election, Turnbull told us in November 2017 that a royal commission was unnecessary and will harm the image and reputation of our major banks. “There is not going to be a banking Royal Commission”, he thundered.
Nevertheless, Nationals Senator Barry O’Sullivan and MPs John (Wakka) Williams and, to a lesser extent, George Christensen had their ears to the ground and were listening to their electorates, whose members were recounting stories of disgraceful behaviour by the Big Four, and demanding action.
The then Nationals Leader and Deputy PM Barnaby Joyce, Australia’s supposed "Best Retail Politician", gave lukewarm support to his backbenchers — but, at that point, he had lots on his mind, including his citizenship issues and (as we later discovered) some unintended consequences of his own.
For Turnbull and the banks, though, the clamour was getting louder. Shadow Treasurer Chris Bowen helpfully pointed out that had the royal commission been called 18 months earlier – when Labor first demanded it – it would be all over by then, with its recommendations being implemented.
The three renegade Nationals backbenchers threatened to cross the floor, which would have caused embarrassment to our PM if a vote was called on the matter. The Big Four banks caved in first, writing to Turnbull on 30 November telling him that an inquiry was now ‘in the national interest’. Only a week after his firm refusal – and showing surprising agility – Turnbull announced the Financial Services Royal Commission that same day.
All this history was nicely outlined by the ABC in early February.
We are discovering every day the shocking behaviour of the banks and related financial institutions.
Given what has been uncovered, one has to wonder what was going on in those bank ivory towers when the CEOs signed that letter. Were they so out of touch with what was going on outside their boardrooms that that thought all was rosy? Or were they aware of what was going on, but thought they could bluff and bluster their way through a royal commission?
Turnbull has since admitted he shouldn’t have resisted for so long the calls for a royal commission but has refused to apologise. Morrison, with his finger firmly on the political pulse, described the revelations as "deeply disturbing".
There have been some high-profile resignations from AMP and CBA, which is great. However, just like the Wall Street "banksters" after the GFC, it’s possible none of the villains will go to gaol.
Nevertheless, the Financial Services Royal Commission will have many positive outcomes for the country.
Success has many fathers, but the real heroes of the Royal Commission should be recognised. It pains me to say this, but these are the three National Party representatives who forced Turnbull’s hand.
Barry O’Sullivan, John Williams and George Christensen: take a bow!
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