Potential Financial Services Minister Stuart Robert
An inexplicable stumble on the handling of financial services by the new Morrison government is a worrying sign that one of the most politically and economically important issues facing the government will be lost in the turmoil of leadership change and a major reshuffle.
As Crikey noted yesterday, it’s unclear exactly who has responsibility for the financial services portfolio after Kelly O’Dwyer, previously responsible for revenue and financial services, was promoted to industrial relations and Stuart Robert was made Assistant Treasurer, with only another junior minister, Zed Seselja, under new Treasurer Josh Frydenberg.
A day later, and it’s still not clear. Yesterday, Robert declared he was in charge, but also seemed to back off and say he only “suspected” he would have the portfolio rather than Josh Frydenberg having it as part of his overarching Treasury role.
Bear in mind financial regulation is, along with wage stagnation, the most important issue facing the government in both policy and political terms. Australia’s system of financial regulation is a disaster area, with ASIC and now APRA demonstrated to be near-useless, and treated with contempt by senior finance industry figures. The result has been massive gouging of customers, a billion dollars and counting of compensation, massive reputational damage to our biggest financial services companies and a swathe of board and management departures, as well as a tightening of credit standards that had some pundits warning of a significant lending slowdown.
And Robert’s confused messages when he did think he was in charge were even more concerning. He attacked Labor for wanting to “regulate it [financial services] to within an inch of its life” and that he wanted “a financial sector that is also self-regulating itself” — in addition to a regulator with “teeth”.
If there’s one lesson that stands out so far from the royal commission, it’s that the financial sector cannot be trusted to regulate itself one bit. Robert might find his line about “self-regulation” being used over and over again by Labor between now and the election, and evidently hasn’t worked out there is literally no mood whatsoever in the community for anything that looks like taking it easy on the banks. Voters exactly want financial services to be regulated within an inch of its life. And we haven’t even had the insurance section of the royal commission hearings, which promise to be another catastrophe for the industry.
The lingering suspicion is that the Liberals will do the bare minimum necessary to kill the issue of financial services regulation politically without upsetting the banks too much. Roberts’ clumsy comments appear to confirm that. As a result, he might have talked himself out of a job already.
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