In 2010, the mining industry spent about $22 million on a six week ad campaign opposing Labor's proposed Resources Super Profits Tax. ABA chief executive Steven Munchenberg finally on the front foot Credit:Justin McManus The campaign effectively blew up Kevin Rudd's prime ministership and he was dumped by the ALP for Julia Gillard, who rapidly made peace with the big miners. Labor proposed a two year, $53 million inquiry last Friday after a series of scandals at the Commonwealth Bank, Macquarie Bank and National Australia Bank, and allegations from corporate regulator ASIC that the ANZ and Westpac rigged the bank bill swap rate. Mr Munchenberg told Fairfax Media that Labor had not made the case for a banking royal commission and that the ABA had "not ruled out" an ad campaign.

"We are not currently looking at such a thing [an advertising campaign] but we are actively considering an appropriate response from the industry. Our main focus at this stage is to highlight the fact of why we think a royal commission would not achieve anything beyond what is already being done," he said. Labor leader Bill Shorten and shadow treasurer Chris Bowen. Credit:Paul Jeffers Mr Ralph said a campaign "would cost banks $20 million or so, being around one 10th of what they'd spend on responses to a commission". While banks made easy targets, Mr Ralph said voters disliked politicians too. "What makes campaigns of this nature successful is impact at the ballot box. I'd demonstrate the core truths, rather than simply claiming them, then run a marginal seat campaign talking about how a commission will increase mortgages, arguing that a vote for Labor is a green light for increased home loan rates. That would cost them seats."

Monash University economics professor Rodney Maddock has estimated the cost of the royal commission could run to $250 million - including as much as $50 million for each for the major banks. Meanwhile, former Reserve Bank board member Warwick McKibbin accused Labor of playing a "dangerous game" with a fundamental pillar of the Australian economy. "When the global financial system is under pressure, you don't want to be having a review based purely on politics. Banks are a key pillar of the economy and this is a dangerous game to play," he said. Both sides of politics traded blows over the inquiry on Tuesday, with Opposition Leader Bill Shorten arguing ASIC did a good job but pointing out it had been hit by a $120 million, four year funding cut in Tony Abbott's first budget in 2014. Shadow treasurer Chris Bowen said a royal commission would - as well as examining the financial sector - probe the power and ability of sector regulators, including ASIC and the Australian Prudential Regulation Authority.

"Is Mr Turnbull really suggesting the right way of determining the resourcing and ability of ASIC is to have ASIC conduct an inquiry into themselves? That is what a royal commission is for." Treasurer Scott Morrison, whose office released a fact sheet arguing ASIC had equivalent powers to a royal commission, questioned Labor push for the probe when it had ignored the findings of the royal commission into trade unions. "It [ASIC] actually has more powers than a royal commission, because it can go ahead and prosecute ... it can act on its own motion, it can take referrals from ministers, it can compel witnesses," he said. The federal government, which is under pressure from its own backbench for so rapidly ruling out the inquiry, has indicated ASIC could receive a funding boost in the May budget. The government fact sheet pointed out both ASIC and a royal commission had coercive investigative powers, that penalties existed for failing to give evidence or concealing documents and that in both cases statements made under compulsion were not admissible in civil and criminal proceedings.

But Labor released a separate analysis from the independent parliamentary library that showed ASIC faced time constraints on its investigations, that ASIC's investigations occurred in private whereas royal commissions were typically conducted in the full gaze of public scrutiny and that when summoning witnesses an ASIC officer needed "reasonable grounds" for the summons whereas a royal commission generally faced no statutory prerequisites. Follow James Massola on Facebook