The spotlight is firmly on the Australian banking industry at the moment, following the publication of the royal commission’s final 530-page report on Monday. However all eyes are also on the government after Treasurer Josh Frydenberg claimed the Coalition would act on all 76 recommendations put forward in the damning final report by Royal Commissioner Kenneth Hayne.
Frydenberg was grilled by presenter Leigh Sales on ABC’s 7.30 program following the release of the report, with the broadcaster questioning the Coalition’s decision to oppose a public inquiry into the banking and financial services industries for so long.
In an attempt to dodge the question, after Sales asked if the government were wrong to “strenuously oppose” a public inquiry into the banking sector for as long as it did, Frydenberg tried to deflect onto the Opposition, saying he could “debate for hours what Labor failed to do”.
“Let me cut to the chase,”Sales then cut in. “Everyone remembers that you opposed the royal commission.
“Let me simply ask, why should the public trust this Coalition government to clean up the banks when you had to be dragged to that inquiry in the first place?”
To which Frydenberg responded: “Well we did call the royal commission and today we have responded to it. Today we have said we’re taking action on all 76 recommendations.
“These are recommendations that will have far-reaching consequences across the financial system, including putting in place the banking executive accountability regime, not just within banks but also within insurance and superannuation companies.”
.@leighsales: Was the coalition wrong to strenuously oppose the #bankingrc for as long as it did?@JoshFrydenberg: Oh we can debate for hours what Labor failed to do-@leighsales: -No, I’m asking about you. @JoshFrydenberg: I’m looking to the future. #auspol #abc730 pic.twitter.com/v73q8Ur9O6
— abc730 (@abc730) February 4, 2019
The 530-page royal commission report tore strips off Australia’s biggest financial sector names over actions that the report charged weren’t just below community standards, but were in fact illegal.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, led by Kenneth Hayne QC, held four rounds of hearings, considered more than 10,000 complaints from the public and examined thousands of documents before delivering its findings to the Treasury on Friday.
The report slammed a large swathe of the financial sector for designing remuneration systems that rewarded bad behaviour by employees, played on customers’ lack of knowledge about financial products or their inability to negotiate better terms, forced consumers to rely on intermediaries such as brokers who did not have their best interest at heart, and failed to hold badly behaved individuals and companies to account.
“Rewarding misconduct is wrong,” the report reads. “Yet incentive, bonus and commission schemes throughout the financial services industry have measured sales and profit, but not compliance with the law and proper standards.
“Incentives have been offered, and rewards have been paid, regardless of whether the sale was made, or profit derived, in accordance with law. Rewards have been paid regardless of whether the person rewarded should have done what they did.”
“Entities and individuals acted in the ways they did because they could,” it went on. “Entities set the terms on which they would deal, consumers often had little detailed knowledge or understanding of the transaction and consumers had next to no power to negotiate the terms.”