The Turnbull government now faces a desperate calculation. The political damage from a successful vote in the House of Representatives to establish a banking inquiry would be massive — perhaps even existential. Not merely would it erase all of the political capital the government has invested in staving off a royal commission, it would be a ferocious blow to what’s left of the authority of the Prime Minister. And the chances of a successful vote have increased significantly in recent days as disgruntled Nationals pursue a combination of longstanding anger at bank misbehaviour and a desire for revenge over marriage equality.
Multiply the increased probability by the huge damage and you get the grim conclusion that the government needs to change tack on the issue, whether it wants to or not. It’s time for the government to establish a banking royal commission.
By establishing its own inquiry, the government can control the terms of reference. Inevitably Labor, the crossbenchers and even some Nats will complain that the terms of reference don’t go far enough. But that reduces the matter to a political he-said-he-said. People aren’t going to cross the floor over it.
It would also lead to headlines about backflips and humiliation. But they’ll pass quickly. A 100% chance of embarrassing headlines versus a 60% chance of existential damage? That’s a no-brainer. The key thing will be the electorate knows an inquiry has been established. They won’t be particularly interested in who backflipped and how many somersaults they did to achieve it. The banks are also prepped for a royal commission. In fact, some of them would’ve preferred to have had one a year ago and avoided all the punishment that has been meted out to them in its place.
All that’s needed is something to provide an excuse for the backflip. The government could wait a week or two for another banking scandal to emerge — for one almost certainly will — or it can take advantage of the settlement of the ASIC case against ANZ and NAB for rate-rigging, in which Federal Court judge Jayne Jagot said the public should be “shocked, dismayed and disgusted” about the banks’ conduct, which was aimed to “corrupt the system for mere short-term gain”. According to Jagot, the banks had abandoned “decency, honesty and fairness” in their behaviour.
Sounds like a pretty good basis for a royal commission given rate-rigging was just one of a dozen scandals or more, up to and including money-laundering charges against the Commonwealth Bank.
It would be ugly, and a backflip, but it would be controlled by the government. The alternative would be catastrophic. Time to make the smart play. Next week now looks a little vacant — what better way to fill the space?
Two problems with this:
1) Should he propose a Royal Commission Turnbull would be giving credibilty to those Nationals who have said they are willing to vote against the Government on this issue. Forget the publc, I cannot see the Liberal party standing for that.
2) Turnbull has already given his enemies a week off to continue plotting his demise. The anti-Turnbull forces within the party room would regard an announcement of a RC as an absolute gift.
Few are listening to Turnbull, most are laughing at him. He is done for.
There is no way in hell that Turnbull would bring on a banking RC because it would absolutely do him in. I understand the Derryn Hinch comment about if being run out of town you should jump to the very front and pretend that it is a parade in your honour, but this is a jump too far in this rabid climate.
Government control has slipped from Turnbull’s grasp and all that remains is political cheap tricks like postal surveys, tax cut announcements and sitting postponements. That’s it – all that is left of the man is piss and wind.
Should he join the revolt against his own leadership by embracing a banking inquiry it would be the ultimate absurdity and his tenure as PM would last as long as a NASA countdown.
Turnbull was CEO of a merchant bank in Australia. It is is extremely likely that he would be called by an independent RC – and quite possibly have finding adverse to him.
It would also mean Labor was right about this too, from way back.
Stop pressuring Turnbull for a Royal Commission into banking. Let’s be patient until Shorten, as PM, announces one with effective terms of reference which will be more stringent.
Remember the Cole Inquiry (UN Oil-for-Food scandal) in 2005, when Australian Wheat Board executives & DFAT (Downer) were ducking for cover? John Howard’s government set the terms of reference: the outcome was a non-event, an underfunded, under-resourced investigation by the AFP which resulted in no convictions. Ergo a perfect blueprint for any Turnbull banking Royal Commission.