Australia’s financial services sector will be overhauled by the end of next year in the hope of rebuilding consumer confidence in the industry, Treasurer Josh Frydenberg has declared.
However, the opposition has accused the treasurer of dragging his feet in response to the damning banking royal commission.
Mr Frydenberg set a timetable for implementing recommendations from the commission in a speech to the Victorian Chamber of Commerce and Industry on Monday.
“The need for change is undeniable and the community expects that the government’s response to the royal commission will be implemented swiftly,” he said.
“These reforms are critical to restoring trust in Australia’s financial system.”
The reforms involve changes to corporations law, superannuation, insurance and financial services, with the treasurer saying they are the most comprehensive in three decades.
Treasury and the Office of Parliamentary Counsel will receive a $9.3 million boost to ensure the government’s ambitious timetable can be met.
Commissioner Kenneth Hayne made 76 recommendations for reform, including 54 for government, 12 for regulators and 10 for industry.
Mr Frydenberg says more than 20 changes will be made or introduced to parliament by the end of the year, with all acted on by the end of next year.
Shadow treasurer Jim Chalmers said after six months of inaction, the government now wanted to be congratulated for releasing an overdue timetable on implementing the recommendations.
Mr Chalmers said victims of banking misconduct would be deeply disappointed some recommendations would not be implemented for another 15 months.
“Australians know that the Liberals aren’t serious about dealing with bank rorts and rip-offs. They are only reluctantly and belatedly responding to the shocking issues that have been raised,” he said.
Older Australians’ advocacy group COTA says the timetable shows the government is taking the reforms “very seriously”, calling for both sides of parliament to back the legislation.
It has also stressed the need for more consumer voices and advocates in the financial system, an idea not included in Commissioner Hayne’s recommendations.
“Stronger consumer voices are needed to ensure the ongoing success of these reforms,” COTA Australia chief executive Ian Yates said.
The government has backflipped on putting an end to trail commissions for mortgage brokers, instead announcing a review into the issue in three years’ time.
One Nation leader Pauline Hanson says mortgage brokers should be left alone, arguing they’re not to blame for a lack of confidence in the banking industry.
Senator Hanson has also called for the return of a commonwealth-owned bank run by the government.
Consumer advocacy group Choice has warned lobbyists are already fighting changes to the industry, making the path to reform difficult.
“The federal government will need to stand strong against industry pressure to ensure that the royal commission recommendations are implemented effectively,” Choice CEO Alan Kirkland said.
“The only way to solve the problems uncovered in the banking royal commission is to make sure these reforms are passed as intended, as rapidly as possible.”