Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Tuesday, 4 October 2016
CARRIE BICKMORE: To make the Government’s case about why we don’t need a Royal Commission, we are joined by Finance Minister Mathias Cormann. Minister, two-thirds of all voters want a Royal Commission into the banks, including 62 per cent of Coalition voters. Why are they wrong?
MATHIAS CORMANN: A Royal Commission will not actually achieve anything to help banking consumers. We have had several very comprehensive inquiries in recent years. They have made many recommendations, which have progressively been implemented by Government. Our Government has been taking action to actually help deliver improved outcomes. We have given additional power and additional resources to the regulator in ASIC. This process now, forcing the banks to be accountable to the Parliament and through the Parliament to the Australian people, is an additional feature of the increased scrutiny that the banks appropriately are subject to.
WALEED ALY: 'm a bit unclear about this because if we've had all these reviews, then why are you going through this? I mean, why call them to Canberra? Why ask them a bunch of questions that ultimately end up going nowhere?
MATHIAS CORMANN: Because this is a part of an ongoing process of making sure that the banks are accountable to the public. An important point to make here is that the banks play a very important role, are a key foundation in our economy, a key facilitator in our economy. Strong and stable banks are important for consumers. They are important for savers. They are important for business, small and medium-sized businesses. If you look at the Australian banking sector, which is well regulated overall, it has performed very well in the context of the global financial crisis, where banks in other parts of the world failed, with all of the disastrous consequences to the economies in those countries that come with the failure of banks.
WALEED ALY: They've also ripped off customers. We've seen them give dodgy financial advice. People have won Gold Walkleys exposing that sort of stuff. We've seen precious little from the Government by way of response. We've taken money from ASIC and returned some of it and somehow said that fixes it. We've got no clear legislative agenda to deal with this. Now they're going before a committee, most of who are Coalition members of the Government that doesn’t seem to want to take the action. I can see why two-thirds of the Australian public would want to see a royal commission.
MATHIAS CORMANN: That is not quite right. A lot of the events that are being investigated and continue to be brought up are historical events that took place in the course of the previous administration. To give credit to the previous administration, they actually started the process of reform through the Future of Financial Advice reforms and various related reforms. We have continued that reform process. Our focus is very much on pursuing reform that actually makes a difference, that helps consumers with genuine and legitimate grievances to get resolution of those grievances, efficiently and effectively. We are always open to suggestions on how that can be further improved. But a Royal Commission, running another inquiry with the same powers that ASIC already has for another couple of years doesn't actually do anything to help resolve specific issues for specific customers that they may or may not have in relation to the banks.
CARRIE BICKMORE: Alright, Minister, we'll have to leave it there. Thank you so much for your time.