As we saw with the recent ABC Four Corners report on juvenile detention, there are times when the path to a royal commission is unavoidable. When public sentiment moves to such an extent, it’s a crazy brave government that stands in the way.
Like allegations of abuse in juvenile detention, allegations of financial misconduct in some banks have been around for years. So have calls for a royal commission into banking misconduct. From Greens senator Peter Whish-Wilson, from Nationals senators John Williams and Matt Canavan and finally from Labor in April this year before the election.
So far, it has all come to nought. During the election campaign and in the face of the latest allegations of rate-rigging, Malcolm Turnbull said the corporate watchdog, the Australian Securities and Investment Commission (Asic) was “sinking its fangs” in. Problem solved.
But pressure is building. There has already been one senate inquiry into financial advisors at the Commonwealth Bank. NAB, ANZ and Westpac have faced rate rigging allegations. Asic is also investigating Comminsure – the insurance arm of the Commonwealth Bank – which is accused of manipulating reports to avoid life insurance payouts to sick and dying customers, in some fantastic investigative journalism by Fairfax’s Adele Ferguson.
If the juvenile detention scandal has shown anything, the right evidence, in the right moment, can crack open an issue to the point where government has no other choice but to act.
While Bill Shorten said he would pursue a royal commission in the parliament given Turnbull’s slim majority, such an inquiry cannot be forced through legislation. There is no bill for a royal commission - it can only be established by executive government.
As a result, Labor is exploring the committee process which could expose evidence in the financial services industry to force the government to act. A coalition of Labor, the Greens and assorted crossbenchers could bring about another inquiry into the banks through a private bill - option B after a royal commission.
There are reasons it is option B. While a senate committee can take evidence under oath and require people to attend and produce documents, it rarely compels witnesses, unlike a royal commission.
A royal commission has stronger powers. It also has the capacity to fund witness costs and bring in expert counsel – a crucial factor in running an inquiry into the corporations as powerful and wealthy as the banks. You need to know where to look.
An Essential poll in April showed a clear majority of respondents favoured a banking royal commission. Labor’s and the Greens’ pursuit of the issue – not to mention John Williams who crossed the floor on the issue – shows no sign of waning.
But in the face of opposition to the royal commission from the Coalition, a committee inquiry may be the foot in the door.
