The Coalition has dug in on its opposition to a royal commission into malpractice in the banking industry, with Malcolm Turnbull saying it is little more than a “distraction” by Labor.

It was the first time Turnbull commented on the royal commission, which was proposed by the opposition leader, Bill Shorten, on Friday.

“Bill Shorten’s call for a royal commission into the banking industry is just another distraction, just a thought bubble, to respond to the news of the week,” the prime minister told reporters on Sunday, in comments that echoed sentiments from members of his frontbench.

Earlier in the week, Turnbull had given the banks a serve for failing to put customers first. On Sunday, he said cultural change was needed above legislative change.

“The critical thing here is that the high standards of putting the customer first, of ensuring that the trust of the community is justified,” Turnbull said. “That requires leadership from senior bank managers and they are providing that leadership and they will provide more. We have a strong regulatory structure to do that.”

He said the Australian Securities and Investment Commission (Asic) and the Australian Prudential Regulatory Authority had sufficient powers to regulate the banking industry.

“It has banned people from industry, it has enacted fines, it’s a very active regulator,” Turnbull said of Asic.



The resources minister, Josh Frydenberg, told the ABC’s Insiders program on Sunday: “I just think this is a bit of populist politics. This is just a distraction from Bill Shorten.”

The immigration minister, Peter Dutton, said Labor would be ramping up populist sentiment before the federal election, which is presumably “only weeks away”.

“If Mr Shorten is out there running populist lines well we’ll let him do that,” he told Sky News on Sunday.

The Greens welcome a potential royal commission into banks.

“We’ve been calling for it for a long time,” the Greens MP Adam Bandt told Sky News.