In the lead-up to Monday's release, Prime Minister Scott Morrison and Treasurer Josh Frydenberg have cautioned that any changes to the regulatory framework as recommended by Commissioner Hayne must be balanced to ensure lending is not squeezed further.

Mr Frydenberg said the government's response would be guided by the need to restore trust in financial institutions, ensure lending was not squeezed and to ensure competition was maintained. The latter indicates the government will go lightly on mortgage brokers and small banks.

Labor believes the tightening in credit over recent months, to the extent that it was caused by trepidation about the royal commission, should ease when the findings are released. Treasury has also warned of a decline in household spending in the aftermath of the final report.

Mr Morrison has also given a commitment in principle to implement all the recommendations and both sides will issue an initial response after the report is released at 4.10pm on Monday, after the markets have closed.

No time for legislation

Government sources confirmed there were insufficient sitting days of Parliament between now and the May election to legislate responses to the recommendations.

Between now and the election, Parliament sits for just 10 days of which the Senate sits for only five. Both sides said there would not be enough time to legislate any meaningful response to the royal commission, meaning each will take their policy responses to the election.


The government may put to a vote before the election superannuation changes that have been around since the last budget – a collection of measures aimed at stopping accounts with balances of $6000 and less being eroded by fees by banning exit fees, capping administration fees at 3 per cent, automatically amalgamating low-value accounts held by the same person and preventing inappropriate insurance premiums eroding member account balances.

These changes are stuck in the Senate as Labor holds out for amendmentsto the insurance provisions, prompting accusations is it protecting union-aligned industry funds and life insurers that are resisting the changes.

More comprehensive changes to superannuation as recommended by the Productivity Commission in a report released in January will form part of the government's response to the royal commission. Again there is the potential to try to wedge Labor over its allegiance to industry funds with a proposal to decouple super from industrial relations. In some industrial agreements, workers are defaulted into an industry super fund.

Mr Hayne's interim report released before Christmas said the problem was not with the laws governing bank behaviour but that the laws were neither being obeyed nor adequately enforced. Both sides expect recommendations aimed at tightening the regulatory framework.

Labor pushed the Coalition into holding the royal commission and wants to maintain the political ascendancy.

Mr Shorten attempted to get out in front of the findings on Sunday by promising that, if elected, Labor would introduce a scheme similar to that in the United States and Britain where whistleblowers in all sectors, not just the banks, were rewarded financially for dobbing in corrupt bosses. They would receive a proportion of any financial penalty imposed on the transgressor.


Mr Shorten said too often it was the whistleblower who suffered reprisals.

"Are we a country that says we want people to sacrifice everything to expose illegality or corruption and then we punish them?" he told Insiders.

"What our plan means for people who are doing the wrong thing is that just beware of the person next to you because they might want the reward and not put up with the corruption.

"We want to say to whistleblowers: we've got your back."

David Rowe

Industrial relations Minister Kelly O'Dwyer said the laws were unnecessary given she had similar laws that had passed the Senate and should pass the House of Representatives this month. The laws enable a whistleblower to go to the media rather than authorities.

"It's too little too late from Bill Shorten and of course this whacky idea that you hand taxpayer dollars over to people who might have been involved in corporate misconduct themselves is not one that I think would sit well with most Australians," she said.

"In the US we have seen a scheme where people can do the wrong thing and be put in jail and receive taxpayer dollars. I'm sure Australians don't want to see that scheme instigated here in Australia."

Ms O'Dwyer also stepped up calls for Labor to pass the super changes when Parliament resumes next week.

"When he was financial services minister, when he was responsible for superannuation, he was the minister responsible for uncapping the fees for low-balance accounts and giving people insurance that they didn't want, didn't need and in some cases couldn't even claim on, she said of Mr Shorten.

"Bill Shorten right now in the upcoming parliamentary session should back important legislation that would give people protections for their retirement savings," she said.