If the Turnbull government decides to hold a royal commission, Mr Shorten is expected to fully co-operate and provide suggestions. Opposition Leader Bill Shorten and the shadow treasurer Chris Bowen have taken the lead in the battle over the financial services scandals and will hold a royal commission into the sector if Labor wins the next election. Credit:Andrew Meares It follows a string of financial scandals in the past few years, including the CBA financial planning scandal, bank bill swap rate rigging and the CommInsure life insurance scandal, which saw sick and dying people denied claims. Many of these stories were broken by Fairfax Media. A key area to be considered in any royal commission is compensation for customers and the treatment of whistleblowers. Mr Shorten said Labor's support for a royal commission was a decision not made lightly.

"Public confidence in the banking and finance industry has taken hit after hit the past few years," Mr Shorten said. "There are literally tens of thousands of victims if not more. Today I say, enough is enough." Mr Shorten cited retirees ripped off by planners, small businesses being driven to the wall by banks and the recent news major insurance companies (most notably CommInsure) had worked to ensure terminally ill people with life insurance were denied claims The royal commission is estimated by the Parliamentary Budget Office to cost $53 million and take two years to complete. When asked why Labor had waited years to call for a royal commission into banks Mr Shorten said: "After every financial scandal we have been told this is an isolated incident. But there's only so many isolated incidents you can have before you have a systemic problem."

Today I say, enough is enough. Opposition Leader Bill Shorten Mr Bowen said the royal commission would cover banks, superannuation funds, other financial institutions and insurance companies. The royal commission will look at whether illegal and unethical behaviour in the financial services sector was widespread, duty of care financial institutions have to their customers, how business structures affect the behaviour of finance sector employees and whether Australian regulators have enough resources, Mr Bowen said. Terminally ill cancer sufferer Evan Pashalis​ whose life insurance claim was denied by his insurer CommInsure (he was paid out after he appeared in a joint media investigation) welcomed Labor's call for a royal commission. "We have banks that are too big to be held accountable they are playing games with the lives of ordinary Australians and I believe government intervention is long overdue," Mr Pashalis said.

Two Coalition MPs, John Williams and Warren Entsch, had already called for an inquiry before Labor's announcement on Friday, creating a further headache for the government. Treasurer Scott Morrison lashed Labor for the move, arguing ASIC, APRA and the Reserve Bank were capable of providing the regulation the sector needed. "The government is not proposing a royal commission and we have opposed one consistently," he said. "This is Bill Shorten playing politics in the lead up to the election on a very serious issue, it's reckless distraction from his failure to come to terms with the fact that he wants to defend corrupt and criminal practices in the construction industry." Australian Bankers' Association chief executive Steven Münchenberg said the Australian banking industry believes a royal commission into financial services is unnecessary and a waste of taxpayer funds.

"Banks do accept that in the past they have not always lived up to their own standards, let alone those of their customers," Mr Münchenberg said. Mr Münchenberg said the ALP's proposal would also have international ramifications for Australia because it would send "alarm signals" to international investors. He also said there had already been inquiries into the banking sector that had produced changes to legislation. The ACTU backed the inquiry to "restore faith in this critically important sector". Senator Williams has been calling for a royal commission into the financial services sector for years. He ramped it up during the CBA financial planning scandal exposed by Fairfax Media in 2013. He recently crossed the floor in support of a motion by the Greens for a royal commission and voted against his Coalition colleagues.

Senator Williams said he would support any political party to bring about a royal commission. "We have seen too many scandals, too many people ripped off and sick people denied their life insurance claims," he said. "I hope the numbers build to have a royal commission. I have been saying it for years. "We need a royal commission to clean up the industry, they've shown they can do it themselves. It has been like a domino effect over the past few years with a new catastrophe every year, the latest being life insurance. It is all about profit and to hell with the people," he said. Commonwealth Bank whistleblower Jeff Morris said he agreed "wholeheartedly" with Mr Shorten that this is the time for a royal commission. "We had fine words from Malcolm Turnbull on Wednesday about the state of the finance sector but what counts is deeds, not words," Mr Morris said.

"Refusing to call a royal commission 18 months ago was the worst captain's call of the Abbott government and to date all Malcolm Turnbull has shown is that he is just a leopard with slightly different spots," Mr Morris said. Mr Morris said that so many victims of poor financial advice were still yet to be compensated showed the need for a royal commission rather than compensation schemes that were not delivering outcomes for consumers. Merilyn Swan, whose elderly parents were victims of shoddy financial advice at CBA and a management cover-up, said anything less than a royal commission into the financial industry would be a slap in the face to the millions of Australians who do have a moral compass. "The activities of the financial industry have adversely affected many more Australians than the activities of the CFMEU. Time for Mr Turnbull and the government to get serious and have the royal commission the Senate Inquiries and the public are demanding."