The agency the government is invoking as its justification for not holding a royal commission into the banking sector has had its budget slashed, lost 14% of its staff and faces more funding cuts in real terms in coming years. And the Australian Securities and Investments Commission admits the cuts have already significantly diminished its capacity to pursue corporate crooks.

"ASIC has the powers of a royal commission. In fact it has greater powers," Treasurer Scott Morrison said on Friday, dismissing the case for Labor's proposed royal commission into banks. This "tough cop on the beat" line was repeated by Resources Minister Josh Frydenberg and Immigration Minister Peter Dutton on the weekend.