Treasurer Scott Morrison has put the banks on notice as he tries to blunt Labor’s push for a banking royal commission.
Mr Morrison has unveiled a $127 million package to beef up the Australian Securities and Investments Commission following major scandals in the financial services industry.
He’s forcing the banks to foot most of the bill and has warned of a “furious” response if they pass the cost onto customers.
And he didn’t mince his words when it came to what’s expected of the corporate regulator’s chairman, Greg Medcraft.
“We want an ASIC that leans forward and we want an ASIC that actually prosecutes and takes those matters up,” Mr Morrison told reporters in Canberra.
“He’s well tasked and I expect him to get it done.”
The opposition says the federal government is playing catch up, coming under pressure to act after Labor announced a royal commission into the sector if it wins the next election.
Opposition Leader Bill Shorten slammed the government’s decision to take $121 million from the banks as an attempt to avoid a royal commission, labelling it “hush money” that wouldn’t fix the problem.
“You can see Mr Turnbull’s fingernail marks being dragged across the concrete of parliament in Canberra, where he desperately wants to do anything except see the truth shine through in the banking and financial services sector.”
Mr Morrison says the plan provides concrete action, unlike a royal commission that would produce a report in several years’ time.
“That isn’t getting any outcomes for anyone – all that is getting is a cynical political outcome for Bill Shorten before an election.”
The banks will cough up an extra $121 million to beef up ASIC – a cost the treasurer says is easily digestible.
“I would be furious if I thought this was being sought to be passed on by the banks, and you can be absolutely assured they will be getting that message from me.”
From 2017/18, ASIC will be entirely funded by the financial industry instead of taxpayers.
There’s also a review into how various complaint schemes and tribunals can be rolled into a one-stop-shop for consumers.
Mr Medcraft’s term will be extended for 18 months and the government will appoint an additional commissioner with expertise in the prosecution of financial crime.
Banking and business groups welcomed the announcement but the ACTU said it was disappointing the government chose to fiddle around the edges instead of ordering a royal commission.
“It doesn’t even restore the cuts already made to ASIC and does nothing to right the wrongs experienced by so many Australian families, farmers and small business owners,” president Ged Kearney said.
The Customer Owned Banking Association said big banks that have caused problems for consumers should foot the ASIC bill.
WHERE’S THE MONEY GOING?
* $61 million to modernise ASIC’s data management systems, enhance data analytics and surveillance capabilities.
* $57 million for increased surveillance and enforcement, particularly around financial advice, life insurance, responsible lending and breach reporting.
* $9 million so ASIC and Treasury can implement recommendations from the Murray inquiry.