Prime Minister Malcolm Turnbull says the difference between the banking and construction industries is that the financial services sector is already heavily regulated.
Mr Turnbull has rejected calls from Labor for a royal commission into the banking sector after a string of scandals that have rocked the industry, saying it is just a distraction created by Opposition Leader Bill Shorten from the government’s attempt to restore a construction watchdog.
“You already have a very strong, powerful regulators there monitoring that (banking) industry and taking action,” he told reporters in Sydney on Sunday.
He said Australia did have a strong regulator in the Australian Building and Construction Commission as well, until Labor abolished it.
Liberal frontbencher Peter Dutton said Australia’s regulators, like the Australian Securities and Investment Commission, already have more powers than a royal commission and can impose penalties if a bank does the wrong thing.
“It is important that when banks do the wrong thing and in cases where they don’t abide by their codes or expose clients to unnecessary risk, they should be held by account by regulators,” Mr Dutton told Sky News.
Fellow minister Josh Frydenberg said he wasn’t quite sure what Mr Shorten believes in because only last year he voted against a royal commission into the banks.
“He has shown he’s not prepared to listen to a royal commission with the Australian Building and Construction Commission, so I just think this is a bit of populist politics,” he told ABC Television.
The government will attempt to restore the ABCC in a special sitting of parliament starting on April 18.
But Greens MP Adam Bandt applauded Labor coming on board in pursuit of a royal commission and believes it will be a frontline issue in the election campaign.
The Greens believe there should also be a discussion on a levy on the big four banks, who get an enormous amount of public support which gives them a leg-up against their competitors.
“They know the government will step in if they get into trouble or look like falling over,” Mr Bandt told Sky News.
This “too big to fail” mentality allows the big four banks to borrow money much more cheaply than their competitors, he said.