TOUGHER, FAIRER, FASTER – LABOR’S RESPONSE TO THE
BANKING ROYAL COMMISSION
Labor fought for the Banking Royal Commission – unlike Scott Morrison and the Liberals who voted against the Royal Commission 26 times, called it a “populist whinge” and refused to give parliament more time to implement the recommendations.
A Shorten Labor Government will implement 75 recommendations of the Royal Commission in full and stand up for Australians affected by banking misconduct.
This stands in stark contrast with Scott Morrison and the Liberals, who continue to protect the big banks and are delaying, watering down or rejecting at least 15 recommendations.
Unlike the Liberals, we will fully implement the Royal Commission’s recommendation to end the hawking of insurance products, to ensure there are consequences when the big banks breach industry codes and to ban life insurance commissions if ASIC finds there is no clear justification for retaining them.
Labor has already announced tough new accountability mechanisms on the banks and regulators to ensure that a further 23 recommendations are implemented in full, as soon as possible.
Labor has also already drafted bills to enact five of Commissioner Hayne’s recommendations – these could be law before the election if Scott Morrison ends his protection racket for the big banks and agrees to extra sitting weeks in March.
Labor will establish a groundbreaking victim compensation package. It’s the courage of victims who have shared their stories that has shown us the need for reform. We must ensure that these victims aren’t left behind as we clean up the sector after a decade of misconduct. Under Labor’s plan, more victims will have the opportunity to pursue a just outcome, and all consumers will benefit from quadrupled AFCA compensation caps going forward.
Labor will also abolish trail commissions from lenders to mortgage brokers and aggregators on new loans from 1 July 2020 as well as banning volume-based commissions and ‘soft dollar’ payments being offered to brokers by lenders.
Labor will deal with the Royal Commission’s key concerns with mortgage broker remuneration, namely conflicted remuneration and incentives that drive higher average loans sizes that may not be in the consumer’s best interests. We will impose a fixed percentage upfront fee for brokers that will eliminate the conflict of interest that comes from different lenders offering different commission rates, while ensuring these upfront commission can only apply to the amount drawn down by the borrower, not the total loan amount.
Scott Morrison never wanted the Royal Commission – he voted against it 26 times. He described it as a ‘populist whinge’, a ‘reckless distraction’ and a ‘QC’s complaints desk’. For 600 days, while Labor pushed for this Royal Commission, the Liberals fought for the banks to get a $17b tax handout. Now his government is deliberately going slow on the implementation of its recommendations.
The Liberals simply cannot be trusted to crack down on the big banks.
Labor’s position is crystal clear – we will implement 75 recommendations in full. The single remaining recommendation – Recommendation 1.3 – will be implemented in a manner that will achieve the objectives set out by Commissioner Hayne. More detail on this recommendation is in our full response.
Labor called for this Royal Commission, Labor fought for this Royal Commission, and Labor will work day and night to ensure that we deliver the reforms recommended by the Royal Commission.
Our full response is available here.
FRIDAY, 22 FEBRUARY 2019