Malcolm Turnbull’s contortions over the banking royal commission highlight the Prime Minister being so right yet so wrong. His government resisted calling it until even the banks themselves wanted it. Even then, ministers assumed it would vindicate the financial services sector and highlight that Labor’s push for the inquiry – opportunistically just before the 2016 election – was populist tit-for-tat for Bill Shorten’s humiliation before Tony Abbott’s royal commission into trade union skullduggery.
Like all of us, Mr Turnbull must be appalled by the evidence that has so quickly tumbled out before royal commissioner Kenneth Hayne QC. And that it would so quickly reveal so many bankers, board members and financial advisers as rapacious buzzards picking the carcasses of their loyal clients’ hard-earned savings. Even when you’re dead, it seems, your banks own you.
Despite having had the opportunity to do so when he was Financial Services minister in the last Labor government, Mr Shorten crows the commission is Labor-inspired disinfectant for a toxic industry. He has sucker-punched Mr Turnbull into defending his decision to resist holding the commission, effectively accusing the Prime Minister of protecting corporate criminals from justice. Watching current Financial Services minister, Kelly O’Dwyer, on last Sunday’s Insiders programme on the ABC – presumably on PMO orders to concede nothing – was excruciating.
It then didn’t take the PM long to throw Ms O’Dwyer to the sharks and say what should have said when the inquiry was announced last November: that ‘politically, we would have been better off setting one up earlier’. Hindsight is a wonderful thing, but Mr Turnbull’s admission shows how much he misjudged the politics of an issue really mattering to Australians.
How much earlier? If Mr Turnbull was as deft a politician as he was a business dealmaker, he would have announced a royal commission the day after his excellent Westpac speech in April 2016. Then, the Prime Minister and former Goldman Sachs banker accurately diagnosed the cancer in his former industry that Mr Hayne and his relentless counsel assisting now are bringing to light.
‘Banks don’t just operate under a banking licence, they operate under a social licence and that is underwritten by public confidence and trust’ he said then. ‘Our bankers have not always treated their customers as they should… banks need to very publicly demonstrate that their values of trust, integrity, placing the customer first in every way – these must be lived and not just spoke.’ Well said, PM.
The banker Prime Minister’s prescient diagnosis now is being vindicated. The appalling, disgraceful treatment of customers; a cut-throat, bonus-driven industry culture rewarding the quantity of the revenue written and not the quality of the advice and services given; and the complete and utter disregard of legislation and the contempt shown to the corporate watchdog Asic, that have been on display at the royal commission this past fortnight makes a mockery of the ‘we’re here to help you’ soft-focus, virtue-signalling, feel-good adverts promoting major banks that seemingly have been booked to fill every prime-time ad break since the royal commission was announced. (And let’s not even start on the grovelling, politically correct ‘diversity and inclusion’ mantras so ubiquitous these days).
Mr Turnbull defended his delay in calling the commission by pointing out the regulatory good the government has done in the last two years, arguing that had the inquiry been called in 2016 all this would have been put on hold. But in doing so, the Prime Minister proved once again he is no politician.
A shrewd politician knows sunlight is the best disinfectant. An independent royal commission shines the light of truth into the darkest crevices to be a springboard for otherwise unpalatable reform. That’s what the Abbott trade union royal commission did, and what the Hayne inquiry does now. They shock, make the case for sweeping reform irresistible, and ensure the government initiating the inquiry sets the agenda, not follows it. They slash bureaucratic red tape, outwit Opposition games and challenge Senate crossbenchers to put public interest before theirs.
Instead, and despite anticipating precisely what Mr Hayne is finding, Mr Turnbull and his government look defensive, reactive and indecisive where in 2016 they could have been exactly the opposite, booting the opportunist and hypocritical Mr Shorten into the political swamp from which he came.
It’s now up to Mr Turnbull and Ms O’Dwyer to salvage something from their self-inflicted political mess. They must act on the royal commission evidence and legislate urgently before the looming election to ensure the black heart of the financial services industry is cut out.
If they don’t, Mr Shorten merely gets yet another reason to justify his undeserved political existence.