The Labor leader says in a letter to the PM that the banks had put profits before their ‘social licence’ and trust of the people

This article is more than 4 years old

This article is more than 4 years old

The Labor leader, Bill Shorten, has written to Malcolm Turnbull asking him to reconsider his opposition to a banking royal commission.



And Labor senator Sam Dastyari has suggested that if the government continues to oppose the idea then both houses of parliament could establish the inquiry over the prime minister’s head.

Shorten wrote to Turnbull on Sunday saying it was good to see him reminding the banks recently that they “operate under a social licence” from Australians, and that that licence is “built on a foundation of trust.”

He said unfortunately the banks had “put their profits ahead of the social licence” two weeks ago when they refused to pass on the Reserve Bank’s rate cut in full.

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He also said in the banks’ latest financial updates there was little evidence that they had done “the appropriate remedial work” to address the issues and scandals undermining confidence in the banking system.

“I write to ask you once again to reconsider your position and support Labor’s proposal for a royal commission into Australia’s financial services industry,” Shorten’s letter says.

“You have previously advocated industry-led responses to the crisis of ethics and culture within Australia’s financial services sector … [but] it is clear that these are not sufficient to bring bad behaviour to light in a timely way or restore confidence in this important sector.

But on the same day as the letter was sent, Labor senator Sam Dastyari said there was a good possibility that a banking royal commission could be established without the Turnbull government’s help.

He told the ABC’s Insiders program that if he moved a motion in the Senate calling on the government to have a royal commission it would “sail through,” and he would only need a couple of Coalition MPs to cross the floor in the House of Representatives, and the signs of that were good.

“There’s been a lot of support expressed by different conservatives in both the National party and a few in the Liberal party,” Dastyari said on Sunday.

“Whether or not it would pass the House of Representatives would really depend on whether any of the conservatives are going to cross the floor.”

“But all of this could be fixed if the prime minister just turned around and stopped running a protection racket for Australian banks,” he said.

Dastyari did not say which Nationals and Liberal party MPs he thought may cross the floor to support a royal commission.

If both houses voted for a royal commission it could pressure Turnbull into establishing an inquiry.

There are 150 seats in the House of Representatives, and 76 seats would be needed to form a majority.

The Coalition has 76 seats, a bare one-seat majority government.



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Labor has 69 seats, and there are five crossbenchers. If Labor and every crossbencher voted for a royal commission there would be 74 MPs in favour.

To get 76 seats, Labor would need at least two Coalition MPs to cross the floor, ensuring unarguable majority.

George Christensen, from the Liberal National party in Queensland, is one of the likelier candidates to do so. He has already threatened to cross the floor to oppose the government’s superannuation changes. He could not be contacted.

Nationals MP Warren Entsch once supported the idea of a royal commission but he recently changed his mind, telling Guardian Australia that he now prefers a model whereby an independent tribunal could award compensation to victims of financial scandals.

The five crossbenchers in the House of Representatives are: the Greens’ Adam Bandt, Bob Katter from Katter’s Australian Party, Rebekha Sharkie from the Nick Xenophon Team, and the independents Andrew Wilkie and Cathy McGowan.

Bandt renewed his own call last week for a banking royal commission. Wilkie said on Sunday he “strongly supports the banking royal commission.” Katter told Guardian Australia that he is in favour. And McGowan has previously said she is open to the idea, depending on the terms of reference.

Senator Nick Xenophon would not say on Sunday if his colleague Rebekha Sharkie would support the idea, but he has been strongly in favour in the past.