April 23rd 2016

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Articles from this issue:

Euthanasia: Application of the lesson from cultural history (Part 2)

SPECIAL FEATURE Defence White Paper: Being defenceless invites attack

CANBERRA OBSERVED Banking inquiry suddenly top of Labor's agenda

EDITORIAL Turnbull's school funding plan will help Shorten

FAMILY AND SOCIETY SSCA embeds sexualisation of children in schools

FEMINISM AND FAMILY VIOLENCE Time is ripe to counter the bad-mouthing with truth

SEX EDUCATION "Gender identity" puts vulnerable kids in danger: Pediatricians

THE GENDER AGENDA When schools make Christian kids feel like the enemy

BRITISH POLITICS Corbyn: eccentric, yes; harmless, not so much

SAME-SEX MARRIAGE Dear LGBTQs, Christians want for you what you want


MUSIC Jazz: from common tongue to cliquey dialect

CINEMA The bleak dawn of justice: Batman v Superman

BOOK REVIEW Pius XII acts sub rosa

BOOK REVIEW Meet the new userers


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Banking inquiry suddenly top of Labor's agenda

News Weekly, April 23, 2016

Given the Federal Labor Party’s general attitude to royal commissions over recent years, it is more than ironic that Labor has suddenly decided to demand a judicial inquiry into the nation’s banking industry.

The Labor Party has treated the Cole and the Heydon royal commissions into corruption in the union movement with derision. The ALP ignored the recommendations of the former, while senior Labor figures have lambasted the proceedings of the latter.

Bill Shorten abolished the Australian Building and Construction Commission (ABCC) that the Cole inquiry had recommended, while Justice Heydon says the ABCC should be restored in order to tackle the continuing rampant unlawful union behaviour on building sites.

Labor has thumbed its collective nose at these suggestions because the CMFEU is one of its most important backers, particularly in Victoria.

But the banking industry, which is a soft target, is suddenly in Labor’s sights for an expensive and lengthy public inquiry.

There have been calls for such an inquiry for years – and last year Mr Shorten said no to one proposed by the Greens. But now Mr Shorten says there has been a “string of scandals” which are “systemic” and must be stopped.

What has changed?

The reason for the push for an inquiry into the banking industry is because Labor has made itself vulnerable on its acquiescence to the Road Safety Remuneration Tribunal’s attack on small trucking operators, which is set to become a major election issue.

The Road Safety Remuneration Tribunal (RSRT) was established in 2012 by Julia Gillard to appease the Transport Workers Union, which has never managed to unionise small trucking operators and couriers.

The tribunal has set minimum rates and conditions in the name of “driver safety” for drivers even though there is no connection between the two. The real issue is driving out of the industry any operators who did business outside the clutches of the major trucking companies and the union.

Around 35,000 small operators are at risk.

The Turnbull Government initially said it would legislate to delay the decisions of the tribunal next year. But, after pressure from Nationals MPs, especially Senator Barry O’Sullivan in Queensland and some initial shillyshallying by the Coalition, the Government has decided to abolish the RSRT immediately.

Mr Shorten is milking his proposed royal commission for all it is worth, intimating that Prime Minister Turnbull is protecting his friends in the banking industry.

“I think it is time Mr Turnbull showed his allegiance to bank customers, not just to the big end of town,” he said. “The Labor Party will not rest until we have the strongest and healthiest possible standards in our banking sector.”

Confusion has entered into the Coalition’s line against the Opposition because several Coalition MPs (both Liberal and National) have said a banking royal commission is a good idea.

Australia’s banks have not covered themselves with glory over recent years and series of scandals has involved all the major banks. Mr Turnbull himself has acknowledged this.

Government policy has resulted in a banking sector that is concentrated in four major banks, with smaller institutions and non-banks taking only a small part of the market.

On the other hand it could be argued that the regulatory powers of the Reserve Bank of Australia, the Australian Securities and Investments Commission (ASIC), and the Australian Prudential Regulation Authority (APRA) were fundamental in avoiding the serious banking malfeasance and perverse behaviour that overseas lead the global financial crisis (GFC).

During the GFC, then treasurer Wayne Swan permitted Australia’s “fifth bank”, St George, to be swallowed up by an opportunistic Westpac, thereby reducing competition again.

The question is whether a royal commission is what is required to fix problems in the banking sector.

The ethics and culture of institutions are difficult to change from within and there is a case to be made for using the exposure of a royal commission to change entrenched culture, which is why there is an attraction for such an inquiry within sections of the Coalition.

But the immediate task should be to equip ASIC and APRA with the wherewithal to investigate complaints about banks. In many ways these institutions have greater powers than would a royal commission.

In the meantime the politics will continue. Labor will continue trying to fit up Mr Turnbull with being a friend of the greedy bankers; and the Coalition will continue trying to fit up Mr Shorten as a friend of corrupt stand-over merchants in the unions.

The election posturing has begun, but the people are likely to see through the opportunism displayed in the lead-up to the poll.

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