Having made one long mistake on the banks already, Malcolm Turnbull faces four dangers ahead

The one thing worse than making a political mistake is prolonging it. Prime Minister Malcolm Turnbull had to admit defeat on the banking royal commission on Monday by telling voters he got it wrong by arguing against the inquiry for so long.

He had no choice to face up to this truth but he avoided a deeper admission: that he and the government showed poor judgement in failing to unleash the full force of a royal commission as early as possible.


The disclosures at the inquiry now put to rest any idea that the exercise was not needed. Yet this was the argument from Turnbull and Treasurer Scott Morrison in the time between when Opposition Leader Bill Shorten called for a royal commission in April 2016 and the government announced one in November 2017.

That is a long time to make a political mistake.

The real questions are about policy judgement: decisions in the past to oppose tougher rules on financial advice, complacency in the past about the scale of the harm to customers.

That means Turnbull and Morrison and the government as a whole face at least four dangers.


The first is that the second phase of their company tax cut is probably dead. One Nation leader Pauline Hanson has switched position on this bill yet again. It will be harder than ever for the government to change minds on the Senate crossbench. What is the economic message at the next election if it is not a company tax cut?

The second is that the government’s attacks on Shorten for waging a “war on business” lose power by the day. The behaviour of the banks has a real influence on voter attitudes to big business. This can work to Shorten’s advantage at the next election.

The third is the way attitudes may shift on the idea that Shorten is too close to the unions. The government has bet heavily on demonising unions, using the ample ammunition from unions that have flouted the law. Shorten risks looking weak when he delivers everything the unions want, yet the contrast with the banks is important. Whatever the union officials have done, they have not wiped out the retirement savings of their customers.

The fourth danger is the way this debate reshapes views on Shorten’s judgement. The Labor leader pursued a safe and populist campaign by crusading for the commission, but who would say he was wrong? The Coalition keeps telling voters not to trust Shorten’s judgement on business and the economy. Why should voters believe this warning?

The latest polls show Turnbull is narrowing the gap against Shorten, but the full impact of the banking royal commission is yet to be seen.

Banking regulators should be sacked, Tony Abbott says
The nation’s two opposition leaders will exploit the issue without mercy. Shorten will be able to taunt Turnbull over his bad call, while Tony Abbott will chip away at Turnbull with policy suggestions, as he did on Monday when he called for regulators to be replaced.

Protecting the banks is a mug’s game. No matter what the government did, Labor could and would go harder. Even a $6.2 billion bank levy was not enough to change this dynamic.

It is true the government took some action on the banks rather than choosing an inquiry first, but it is also true that it opposed and tried to water down the Future of Financial Advice laws that Labor imposed on the sector to ensure companies acted in the “best interest” of consumers.

Joe Hockey crusaded against the banks just like Shorten eight years ago. He proposed a nine point plan to fix the sector when in opposition and was handed a gift when Wayne Swan, as Labor treasurer, not only rejected the list but dismissed the need for a financial system inquiry.

The government should have remembered that political lesson. More importantly, it was not alarmed enough about the harm to customers. Now it has been caught out.

Boom 

Legislation in place by Labor , ASIC adequately funded , 50% more staff

Complaints in 2013 191 Labor government No RC required

Then along comes libtards , job and funding cuts ,  carte blanche to banks and complaints sky rocket by a factor of 15 to a record 2810 in two years

Congratulations Bill it's little wonder we needed a RC , congratulations passing it from opposition I repeat from opposition , what a skilled tactician  [/quote]

Rtard Polly Waffle is waffling out of control lost in his fantasy farm dreaming up fairy tales.

Suppose then what else can a bothered bewildered baffled Lefty do but make up fantasies as he sees his hero slipping fast ?

Personally I prefer the TRUTH.

third is the way attitudes may shift on the idea that Shorten is too close to the unions. The government has bet heavily on demonising unions, using the ample ammunition from unions that have flouted the law. Shorten risks looking weak when he delivers everything the unions want, yet the contrast with the banks is important. Whatever the union officials have done, they have not wiped out the retirement savings of their customers.

Another problem with the economy that the Coalition will not fix is the rampant abuse of workers - underpayment, casualisation, wage theft, forced unpaid overtime, sham contracting, short term contracts and other abuses. The sooner we have a strong Labor government fixing these problems, the better off the economy will be.

Fuzzball,

is that black mark on the side of Bull Snorten's head where they tried to operate ?

As usual, the Coalition hacks are indulging in personal attacks because the record of their sorry excuse for a government is completely indefensible.