ABC CANBERRA DRIVE
TUESDAY, 5 FEBRUARY 2019
SUBJECTS: The Banking Royal Commission.
ANNA VIDOT: On the line now, Labor's Andrew Leigh - Of course, Dr Andrew Leigh, MP here in the ACT - for the other side of things and also an economist. So with that hat on as well. Dr Andrew Leigh, welcome to ABC Radio Canberra.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks, Anna. Great to be with you too.
VIDOT: You too. What does parliament need to do most urgently to try to bring the recommendations of the Royal Commission to life and start this, this process towards rebuilding trust in Australia's financial institutions?
LEIGH: I think the first thing would be to sit for as many days as necessary to deal with the Royal Commission's recommendations. What's extraordinary is the government has the Parliament sitting for only 10 days the first half of this year. And given the seismic nature of this royal commission's findings, I think it's absolutely incumbent upon the government to ensure that Parliament sits for as long as it needs to to implement the recommendations.
VIDOT: How many, kind of, days? I mean, we know that we need to have an election by at least the 18th of May - even if we were to sit or if the politicians were to sit every day between now and then, as you say this is pretty seismic stuff, could we still get it done?
LEIGH: Absolutely. I think we can move swiftly on this. Labor has said that in principle we accept all of the recommendations. That’s different from what the Coalition is saying - they've said they will ‘take action’ on them, which as best I can judge is weasel words from the people who voted against the royal commission 26 times, who fought tooth and nail against our Future of Financial Advice reforms-
VIDOT: But now that everyone is on the same page, I guess if - so say it all happens, so you get the extra sitting days or even if you don’t, what would you like parliament to tackle first? What would make the most urgent and significant difference for Australian consumers?
LEIGH: Anna, I'm not sure I'd want to rank these findings. I think there’s a range of important proposals around how we deal with mortgage brokers, around making sure that we end grandfathered commissions, that people aren't paying for advice then they're not receiving. We need to make sure the appropriate oversight mechanisms are in place for ASIC and APRA - the twin peaks of the financial regulators. We need to make sure that the so-called BEAR executive remuneration standards are applied in the appropriate way. It's a clear reform agenda that Commissioner Hayne has laid out. Labor's committed to doing it. We called for this royal commission for 18 months before the government delivered it. We're keen to see its recommendations legislated.
VIDOT: Did the Royal Commission in its findings and recommendations go as far as you believe it needed to? Did it did go far enough?
LEIGH: Look, I think it got the balance right. They've worked very hard on this, looked carefully at issues such as vertical integration, in some areas decided not to recommend reform and others to talk about a timely review. But it really is a wake up call for Australia's banks who've been dudding their customers for too long. The advice paid for but not received, the advice given to dead people, people paying for insurance that wasn't usable - this has been a real breach of faith by Australia's banking sector and my hope coming out of this Anna is that now we're able to build a stronger banking sector in Australia, because finance is the lifeblood of the economy. We need to make sure we don't have a credit squeeze, that households and small businesses can get access to the loans that they need.
VIDOT: And how real is the risk of a credit squeeze as Australia tries to chart this course of reform, do you think?
LEIGH: We need to make sure that we balance that up, but I don't accept that there is somehow a dichotomy where either people get the credit they need or we get high standards in the financial sector. It's reasonable for Australians to expect we have both. Frankly for Australia's banks this is probably a good thing in the long run. They go overseas to the international capital markets every year, borrowing hundreds of millions of dollars, and if their reputation is tarnished that means higher borrowing costs for all Australians. So we need to implement this. We need to get it done. Labor was deeply disappointed the Coalition fought so hard against this royal commission - the Prime Minister even calling it ‘regrettable’ on the day he announced it. We're committed to making sure it's implemented.
VIDOT: Andrew Leigh, thank you very much for your time.
LEIGH: Thank you. Anna.
Authorised by Noah Carroll ALP Canberra.