Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Cormann. Senator Cormann, the letter from the bank CEOs to the Treasurer was dated this morning. Did you make a decision to call a royal commission this morning or have you had other discussions with the banks? If so, will you provide the details of those discussions to the Senate?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I can confirm that the government made a decision this morning.

Scott Ryan (President, Special Minister of State) Share this | Link to this | Hansard source

Senator Whish-Wilson, a supplementary question.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

When this parliament set up two parliamentary commissions of inquiry, we consulted with not only the financial sector but also victims of misconduct and other stakeholders, including community legal centres. You've already said that you've consulted with Treasury, the RBA and the banks on this royal commission. Will the government commit to consulting with other victims for their terms of reference?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The government's announcement today is self explanatory. We did not believe—and it is a matter of public record—that a royal commission was the appropriate way forward. But, given how this debate has evolved and given the increasingly political nature of the debate and how it was impacting on a very important sector for the future success of our economy, we made the judgement that, in the circumstances that Australia had reached and in the national interest, it was appropriate to make the decision that we have made. All of the appropriate consultations have taken place, and the Prime Minister and the Treasurer will continue to make relevant announcements as appropriate.

Scott Ryan (President, Special Minister of State) Share this | Link to this | Hansard source

Senator Whish-Wilson, a final supplementary question.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Currently, banks are only required to keep financial records for seven years. We've seen catastrophes like forestry managed investment schemes in 2009, eight years, ago, and the Storm Financial collapse in 2009, eight years ago. People walking down Collins Street or in Martin Place today might be wondering if it is the sound of shredders that they can hear. Minister, will the government request that the banks do not destroy any documents relative to this royal commission?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

It is interesting that Senator Whish-Wilson is going through the list of years that all these various financial disasters happened, because they all happened under the watch of the Rudd-Gillard Labor-Green government—and, of course, the Labor Party did nothing. In fact, the Labor Party in government said that there was no need for a comprehensive inquiry into the financial system. When former shadow Treasurer Joe Hockey recommended a comprehensive financial systems inquiry, the Labor Party dismissed it and said that that wasn't warranted and wasn't appropriate. We know why the Labor Party has been pursuing this: it is purely politics. Mr Shorten doesn't care about people who are victims of financial—

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Mr President, a point of order on relevance: I asked a specific question about whether the government would be requesting that the banks don't destroy any relevant documents.

Scott Ryan (President, Special Minister of State) Share this | Link to this | Hansard source

Senator Whish-Wilson, the minister is directly addressing other issues that you raised in the preamble to your question.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Firstly, we expect, and we are confident, that the banks will comply with all the relevant laws, and we will expect them to cooperate with the royal commission. It's going to be a matter for the commissioners to determine all of the relevant terms— (Time expired)

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Brandis. On Monday, this minister said:

The problem with a royal commission is that it will take forever and achieve nothing.

What changed between then and now, aside from the banks agreeing to a royal commission?

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

Senator Bilyk, the fact is that a lot of very irresponsible and very foolish statements were being made about the Australian financial system. There is no doubt that establishing a banking royal commission was not the government's preferred option, for all the reasons I outlined, but the government made a decision, based entirely on the national interest, that we needed to protect and defend the Australian financial system from some of the foolish and extravagant statements that were being made in the course of this debate. For that reason, the government decided that it would accede to the will of many in this parliament to establish a banking royal commission, with very specific terms of reference and set up in such a way that it won't last forever.

Scott Ryan (President, Special Minister of State) Share this | Link to this | Hansard source

Senator Bilyk, a supplementary question.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

My first supplementary question is: why would the Prime Minister capitulate to demands from the CEOs of the big four banks when he was not willing to listen to their victims, Labor or even his own backbench?

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

The Prime Minister listens to everybody. He mightn't agree with them all, but he listens to everyone. As I said, Senator Bilyk, in answer to your primary question, establishing a banking royal commission was not the government's preferred course, for all of the reasons that I've explained in this chamber earlier in the week and in previous weeks as well. But, in view of the way this debate was developing, the government does have a concern about the effect that some of the wilder and more foolish claims were having on the Australian financial system. For that reason and, at the request of the banks, to staunch the damage that was being done to confidence in the Australian financial system by some of the foolish claims made in the debate, a royal commission with a certain reporting date and specific terms of reference was necessary. (Time expired)

Scott Ryan (President, Special Minister of State) Share this | Link to this | Hansard source

Senator Bilyk, a final supplementary question?

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I would just point out to Senator Brandis that there's a huge difference between listening and taking action. When was the Prime Minister first advised of the shift of the banks' position, and was the meeting of cabinet this morning called prior to or following the decision by the banks to support a royal commission?

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

I don't know the answer to the first part of your question, because the correspondence of the CEOs of the banks was correspondence to the Prime Minister, not to me. Nor is it the practice of governments of either political persuasion to announce the agenda or program of cabinet meetings.