The report of the financial services royal commission was released on Monday. Commissioner Kenneth Hayne has excoriated the banks and the regulatory agencies, ASIC and APRA. The Coalition government, despite vehemently opposing the need for this royal commission, has now embraced its findings and promised to ensure that all in the money business operate honestly, ethically and in the interests of their customers.
Royal Commissions have become part of political life in Australia. There have been 126 federal royal commissions in Australia since federation covering issues as broad as the butter industry, old-age pensions, drug trafficking, the meat export trade, ASIO and several into trade unions.
Some outcomes are long-lasting; we are still coming to grips with the discrimination and disadvantage exposed by the Royal Commission into Aboriginal Deaths in Custody and with the fallout from the Royal Commission into Institutional Responses to Child Sexual Abuse, which not only exposed the abhorrent behaviour of members of the clergy but highlighted the failure of civil authorities (with some noted exceptions - and here the Newcastle police stand out) to confront the evil in their midst.
Governments generally have to be dragged kicking and screaming to hold a royal commission.
This is not unreasonable; governments cannot be sure what the outcome will be when an impartial, respected, truth-seeking judge, surrounded by a team of dedicated lawyers, researchers and investigators, starts shining the light on the people and practices involved in the issue at hand.
The result is invariably scathing criticism of government agencies and compelling calls for major, costly reforms. The other reason governments do not like royal commissions is that, in many instances, announcing a royal commission is an admission that the government regulatory and enforcement agencies – and their ministers - are not up to their task.
The other reason governments do not like royal commissions is that, in many instances, announcing a royal commission is an admission that the government regulatory and enforcement agencies – and their ministers - are not up to their task.
It seems that now there is a call for a royal commission every time some failure of government is exposed. But I suggest that royal commission should be used sparingly. The powers given to a royal commission, which is a parliamentary process and not strictly a judicial process, are extraordinary.
A fundamental principle of our justice system is set aside: the right of a witness to remain silent or not self-incriminate. Of course, there are trade-offs; although a witness is compelled to truthfully answer questions such answers cannot be used in any subsequent criminal proceedings.
Nonetheless, the commission has the power to compel witnesses to appear and give truthful evidence and to seize documents and other potential evidence as they please.
More important though, often it is shown that government regulatory agencies are not doing their jobs, whether through lack of resources, know-how, or will. We should not need a royal commission to tell us this, the government should just fix it, through legislation, regulation, clear policy direction, and more resources.
At times there will be issues that, because of their ature or complexity, require a royal commission. The Aboriginal deaths in custody and the child sexual abuse royal commissions come to mind and I suggest that, given the political blame game that has followed the recent release of the South Australian royal commission into the Murray-Darling Basin, a thorough, independent, non-partisan, federal royal commission, underpinned by science not politics, is needed.
Did we really need a royal commission to tell us that it is not lawful for banks to charge customers for services that they are not providing or, even worse, to continue charging customers for services years after they had died? Was not the detection and prevention of this type of behaviour simply the core business of ASIC and APRA? The answers are obvious, but I fear that until governments, and we as a community, accept that unless the laws and regulations are adequate, and the government agencies that monitor and enforce them are adequately resourced, directed and empowered, we will continue to hear the clamour of calls for yet more royal commissions.
When you think about it, isn’t the call for a royal commission just another vote of no confidence in the government for failing to do what they were elected to do?