Image: An office worker uses his mobile phone in front of the Sydney Opera House as he leaves Sydney’s CBD September 26, 2012. REUTERS/Daniel Munoz
SYDNEY (Reuters) – Australia’s opposition leader on Wednesday moved a motion for a sweeping public inquiry into the banking system following a series of allegations of misconduct including financial planning scams and insurance fraud.
But the government tried to pre-empt the move by announcing a more tightly focused inquiry into specific cases of bank misconduct against small business customers, just minutes before Labor leader Shorten spoke in parliament.
Shorten told the parliament, which returned on Tuesday after an election in July, that a Royal Commission was the only avenue that had the necessary coercive powers and jurisdiction to deal with bank misconduct.
“Australians are sick and tired of the scandals being investigated after the harm is done,” Shorten told parliament, accusing Prime Minister Malcolm Turnbull and his conservative government of “running a protection racket to protect the big banks of Australia”.
A Royal Commission could be a major headache for the “Big Four” – Commonwealth Bank of Australia, Westpac Banking Corp, ANZ Banking Group and National Australia Bank. They are behind 80 percent of Australia’s lending and have scored strong profit growth for years.
The most powerful investigative body in Australia, Royal Commissions have been held in recent years to address institutional child sexual abuse and corruption in the building trades, with the power to recommend prosecutions and new legislation.
The Australian Bankers Association (ABA) did not immediately respond to request for a comment, but has previously said self-regulation and existing government oversight were enough to prevent what it calls isolated cases of wrongdoing.
A Royal Commission has significant support in parliament, including from minor parties whose clout has grown since the election returned Turnbull’s conservative coalition to power with a one-seat majority.
The government has taken a series of steps in recent months to respond to public concern about the power of the big banks, including beefing up powers of the corporate watchdog and ordering bank CEOs to make annual appearances before parliament’s economics committee.
(Reporting by Swati Pandey and Matt Siegel; Editing by Stephen Coates)
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