While the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has confirmed to Mortgage Business that Commissioner Hayne is “on track” to deliver the final report to the Governor-General by the agreed deadline of 1 February, there is still uncertainty as to whether the government will release the final report next Friday.
However, given the fact that the Treasury publicly released the interim report on the same day it was handed to government last year, there is wide expectation that it will follow suit for the final report.
Shadow Treasurer Chris Bowen has now written to Treasurer Josh Frydenberg, urging him to release the final report once it has been received by the Governor-General.
Mr Bowen said: “It is in the national interest for the Australian people and victims of banking scandals to be able to access the Hayne banking royal commission’s final report and form their own views, at the earliest opportunity, and that means on Friday, 1 February.
“I have written to the Treasurer requesting the release of the final report and related documents of the banking royal commission as soon as practicable after it is received by the government.”
The federal member for McMahon noted that Mr Frydenberg had released the interim report on the day it was received last year, adding that this was “appropriate”.
He continued: “The Liberal Party has no excuses not to release the final report of the Hayne royal commission when they receive it on 1 February...
“Refusing to release the royal commission’s final report immediately would unnecessarily politicise the handling of the report and give rise to potential material market risks around leaks of all or part of the report.”
Treasury will ‘take into account’ market sensitivity
When asked by Mortgage Business what his plans are in regards to releasing the report, Mr Frydenberg said: “The government looks forward to receiving Commissioner Hayne’s final report by 1 February and considering its recommendations as we continue to reform the financial sector.
“The government recognises the potential market sensitivity of the final report and will take this into account in considering the timing of its release.”
In a shot across the bow, the Treasurer added: “One wonders why Chris Bowen is so focused on the timing of the release of the report given last time we released a major report, with the Productivity Commission’s thousand page study into superannuation, he effectively ruled out one of their key recommendations to reform the default system 15 minutes after it was tabled and clearly before he had even read it.”
Further, in a speech delivered to the Sydney Institute earlier this week, Mr Frydenberg told delegates that “restoring trust in the financial system by delivering better consumer outcomes” was “central to government’s thinking” in responding to the report. He suggested that this would also be the case when responding to the government response to the Productivity Commission's inquiry into the efficiency and competitiveness of Australia’s superannuation system.
Mr Frydenberg told delegates: “This requires a culture of compliance and accountability, regulators that are fit for purpose and an acknowledgement by the sector that people must be put before profits.
“All of this must be achieved without inadvertently strengthening the position of incumbents or unduly restricting the flow of credit or other vital financial services that Australians need and the economy relies on.”
The federal Treasurer went on to reiterate Commissioner Hayne’s stance that “simplification” could be key to better regulatory enforcement.
He said: “In his interim report, Commissioner Hayne makes the telling observation that ‘much more often than not, the conduct now condemned was contrary to the law’. He makes clear that while behaviour was poor, misconduct when revealed was insufficiently punished or not punished at all.
“This raises the issue as to whether new laws are required or whether existing laws simply need to be better enforced.
“Simplification may be, according to the commissioner, a better route rather than adding ‘an extra layer of legal complexity to an already complex regulatory regime’,” the Treasurer noted.
While the details of the final report are yet to be released, it is expected that the commission will pick up some of the themes from its interim report regarding the mortgage sector, including the remuneration structure of mortgage brokers, the duty of care obligations on brokers, and the behaviours of the banks.
[Related: Royal commission releases interim report]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.