Shorten pledges finance sector royal commission if government changes

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LABOR today pledged a $53 million royal commission into “illegal and unethical” practices in the finance sector as Turnbull ministers pulled further away from the idea.

A change in government would see an inquiry examining banking, superannuation, interest rate rigging, insurance payouts, credit card complaints, Opposition Leader Bill Shorten said.

The policy will be taken to the looming election as a pledge to stand up for consumers.

After scandal after scandal, and with the importance of banking to the lives of everyday Australians, something needs to give, doesnt it? Mr Shorten told reporters in Melbourne.

The fact is all Australians put their trust in banks. It could be your savings account or your credit card. It could be your mortgage loan or your business dealing.

Families and small business in Australia expect a higher standard from our banks. A royal commission is an inquiry by the executive. It is an examination of what improvements can be made. What are the systemic failings?

He said there was a need to rebuild confidence.

Our actions are motivated by our faith in the banking sector to learn, to improve, Mr Shorten said.

But the government is not impressed by the idea and sees the Opposition policy as a distraction from its promise to hunt down corrupt union practices, particularly in the building industry.

And it will be seen as a reprisal for royal commissions into trades unions and the Rudd Governments home insulation program.

Just as current and former union leaders, including Mr Shorten, were questioned by the Trade Union Royal Commission, top bankers could be called before Labors proposed probe.

Treasurer Scott Morrison wants to leave investigations to existing bodies, such as the Australian Securities and Investments Commission. But he is clashing with some members of the Coalition.

I think supports growing, NSW Nationals senator John Williams told Sky News today.

More around all sides of Parliament, we will see we need to scrutinise our whole financial sector, see that they perform properly, see that their culture is correct and see that the regulators such as ASIC (Australian Security and Investment Commission) and (banking regulator) APRA are doing the job to the best of their ability and are financed to do their job.

Mr Morrison accused Mr Shorten earlier today of an out-of-proportion response to complaints about banks, which were being dealt with by ASIC. And he warned a royal commission could harm confidence in Australian banks.

And what do you think that is going to say to investors looking to Australia? Mr Morrison told ABC radio.

Now you need to have a proportional response that deals with the problem. Now, the problems are identified, theyve been identified by other actions in the courts, and actions taken by ASIC.

He accused Mr Shorten of a reckless distraction that puts at risk confidence in the banking system.

But it was only a year ago that Labor voted against a royal commission into the financial sector it was only a year ago, Mr Morrison said.