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What is a royal commission and why does Labor want one into the banking industry? - Anna Henderson and Dan Conifer -Federal Opposition Leader Bill Shorten says an incoming Labor government would hold a royal commission into misconduct in the banking industry. We look at the role of royal commissions and what would likely be involved. What's a royal commission?Royal commissions are public inquiries governed by an act of Parliament. They can be called on any matter "connected with the peace, order and good government of the Commonwealth or any public purpose or any power of the Commonwealth". Why does Labor want one?The financial and banking sectors have been rocked by controversies in recent years. In 2014 a Senate committee recommended a royal commission into the Commonwealth Bank financial planning scandal. Planners working in Commonwealth Bank Financial Planning were accused of putting clients' money into risky investments while earning hefty commissions along the way. Last month Four Corners and Fairfax uncovered more wrongdoing associated with the Commonwealth Bank, when its insurance arm CommInsure rejected claims from sick and dying policy holders. Two other banks — ANZ and Westpac — have also been dragged to court by corporate regulator ASIC over allegations they rigged inter-bank interest rates. Both banks deny wrongdoing. What powers could it have?The commission has the power to summon witnesses and take evidence. It can authorise police to apply for search warrants. Witnesses who fail to appear can face arrest and detention. The commission can also inspect a range of documents. The shadow attorney general Mark Dreyfus has confirmed Labor's proposed royal commission would have the power to compel witnesses to attend and produce documents as required. "Clearly there's room for argument by banks as to the terms on which the documents are produced but there is no doubt as to the compulsive powers that royal commissions have," he said. "One would imagine that most documents that financial institution and banks could have some claim to commercial-in-confidence... But the royal commission has powers to compel production." What would it investigate?The terms of reference dictate what a royal commission investigates. Labor says it would not release those details until after the election, but shadow treasurer Chris Bowen outlined some key areas of interest. He said it would examine issues such as:
Other issues may come to light in the course of investigating the above. How much will it cost?Labor said its plan to hold a royal commission would cost $53 million over two years, as costed by the independent Parliamentary Budget Office. The Opposition has not announced terms of reference, saying it would do so upon taking government. The royal commission into trade unions, for example, said it had cost $46 million. Previous royal commissions have been given time and budget extensions, which could see the $53 million figure grow, meanwhile the trade unions inquiry came in under budget. |
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