Prime Minister Malcolm Turnbull has simultaneously broken the hearts of the nation’s best remunerated bankers and most ardent socialists by announcing the government will establish a royal commission into the banks but that the exercise “will not put capitalism on trial”.

Whatever the result for the free market and means of production, the path to establishing the inquiry has already proved a major trial for Turnbull’s government. This morning’s News Corp papers outline the final machinations that led to the government’s backflip, with cabinet ministers Kelly O’Dwyer and Scott Morrison failing to talk down Nationals MPs set on the inquiry. According to The Australian ($), O’Dwyer had been working on a contingency plan in case those efforts failed.

After the heads of the big banks wrote to the government conceding the need for an inquiry, the Turnbull government was forced to back away from its almost two-year long opposition to the inquiry. The Daily Telegraph points to ($) former New South Wales premier Mike Baird and ex-Treasury secretary Ken Henry — both now at NAB — as key players in getting the banks on board with the idea of supporting a probe.

In announcing the royal commission yesterday, Turnbull and Morrison said their backflip had been forced by the need to end the instability caused by the political tussle over holding an inquiry. The commission will start in February next year and run for 12 months, with a budget of $75 million.

As Labor tried to wring some final political capital out of the affair, union leaders expressed outrage over the proposed terms of reference, which would drag union-dominated industry super funds into the commissioner’s investigation. A government source told The Australian Financial Review ($) this was “a direct smack at Labor”.

While establishing the commission will mollify the anger among Nationals MPs, some Liberals were quick to background journalists on their own anger at the capitulation.  


It should have been a great day for Sam Dastyari, the NSW Labor Senator who has been a key player in the push for a banking royal commission. Instead, Dastyari’s career is on life support after he was demoted for the second time over his links to Chinese donors, and for comments over the South China Sea dispute. Bill Shorten has stripped the Senator of his position as deputy opposition whip and said he had lost faith in him.

A major player in Labor’s NSW right faction, Dastyari is at least protected from a more humiliating fate for now. Key figures in the right are yet to turn on him, ensuring he will not be booted from the party. The Australian reports Dastyari has discussed leaving politics in recent months and potentially pursuing a career in media in the future.


Australian transgender children will no longer be required to get a court order if they desire hormone treatment.

The landmark ruling by the Family Court means teenagers will be able to access the treatment when both parents and medical advisers agree it is appropriate. Until now, Australia was the only country in the world that required children to obtain a court order before commencing the procedure.


Scott Johnson was victim of gay hate attack at Sydney’s North Head, inquest finds

BOM warns Victoria to be hit by ‘unprecedented’ thunderstorms, flash flooding

Queensland election: Labor closer to win as LNP seats tip over ($)

AFP interviews James Packer on behalf of Israelis over Benjamin Netanyahu probe ($)


Canberra: The deadline arrives for senators to register their citizenship status.

NSW: Last day of campaigning before tomorrow’s byelection in the seat of New England.

Sydney: Prime Minister Malcolm Turnbull expected to be a guest on Neil Mitchell‘s show on 3AW later this morning.

Melbourne: First court date for the Liberal Party and Cormack Foundation, which are in a dispute over funds.

Melbourne: Energy and Environment Minister Josh Frydenberg gives a keynote speech at the CEDA energy conference.

Hobart: The Productivity Commission visits as part of an inquiry into GST distribution.


The one reason Bill Shorten can’t force Sam Dastyari from Parliament: factions — Jacqueline Maley (Brisbane Times): “As one Labor source puts it: ‘If Shorten were to move on Sam, that would tribally get people upset in the NSW Right, even though a lot of them don’t like Sam. Touch one, touch all.’ A second Labor source says Shorten is a ‘transactional’ leader who needed Dastyari to shore up his leadership.”

After years of bank scandals, the people have been heard — Adele Ferguson (Sydney Morning Herald): “The hope is [that the government] doesn’t turn it into a paper tiger by appointing a bank-friendly commissioner who has links to the banks (or has worked in some capacity previously for a bank even as a supposed independent arbitrator).”


Dastyari’s demotion puts increasingly exposed China lobby on notice — Bernard Keane: “Long gone are the days when Labor had a monopoly on cultivating six-figure Chinese donors. The ferocity of the government’s attack on Dastyari might end up backfiring when the next Liberal is exposed for similarly close links to Beijing-connected figures.”

Why Amanda Pepe kept her story about Don Burke quiet for 30 years — Emily Watkins: “She said it never even occurred to her at the time to report Burke — partly because of the era, as well as his incredible power within the industry.”

Walkley awards celebrated by remarkable women and uncomfortable men — Ben Birchall: “In a broader media sense, there was evidence that the old media guard is changing. Among the triumvirate of ABC/Fairfax/News, BuzzFeed’s editor Simon Crerar presented, The Guardian beat out the big networks for best TV/video camerawork and The Wheeler Centre won best radio/audio feature for their podcast The Messenger.


Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.


Peter Fray
Editor-in-chief of Crikey