Bill Shorten has written to Malcolm Turnbull outlining what he thinks should be the focus of a banking royal commission.
On the final day before the parliament sits for the first time, the opposition leader has also invited the prime minister to meet some victims of “bank ripoffs” this week in Canberra, saying it would be good for him to explain to them personally why a royal commission would “delay justice for those who urgently need it”.
After months of criticism that Labor’s calls for a royal commission were too vague and general, Shorten has suggested a succinct set of focus areas.
In a letter to Turnbull on Sunday night Shorten said a royal commission into the banking and financial services industry should examine issues such as:
1. How widespread instances of illegal and unethical behaviour are within Australia’s financial services industry
2. How Australia’s financial services institutions treat their duty of care to their customers
3. How the culture, ethical standards and business structures of Australian financial services institutions affect the behaviour of these institutions
4. Whether Australia’s regulators are really equipped to identify and prevent illegal and unethical behaviour
5. Comparable international experience with similar financial services industry misconduct and best practice responses to those incidents
6. And other events as may come to light in the course of investigating the above.
Turnbull last week said Labor’s idea for a royal commission would be too costly, would run for too many years, and would not help anyone.
He wrote to Shorten saying royal commissions are most effective “when there is a particular event or specific problem which needs to be investigated”.
“A royal commission as you know is no more than an inquiry with the power to summon witnesses and compel the production of evidence,” Turnbull said. “It cannot lay a charge, it cannot change a law. All it can do is inquire and report.
“A royal commission, established with the very wide terms of reference … would run for many years, cost hundreds of millions of dollars and at its conclusion present a report. It would not compensate anybody, it would not prosecute a wrongdoer, it would not change a law or regulation.
“It would delay action and postpone reform. It would delay justice for those who urgently need it.”
He also suggested Shorten should appoint some of Labor’s keenest minds to the House of Representatives economics committee that will eventually compel chief executives of the major banks’ to answer questions about interest rates and bank behaviour.
Turnbull created the new rules for the committee after outrage over the banks’ recent decision not to pass on Reserve Bank’s recent rate cut in full.
The treasurer, Scott Morrison, said the government was frustrated by the banks’ failure to pass on the interest rate cut and needed to do practical things to increase transparency.
In his letter to Turnbull, Shorten criticised the prime minister’s response to the scandals plaguing the banking industry.
“We need to restore trust in our banking and financial system,” Shorten said in his letter. “Your piecemeal approach is doing the exact opposite.”