law question(20th edition)

Background: In December 2017, after years of opposition, dismissal and resistance by the Federal Coalition Government and the Australian financial sector, a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was finally appointed under Commissioner Kenneth Hayes. The Commission examined the behaviour of the big banks (ANZ, NAB, CBA and Westpac) as well as a range of other organisations involved in the sector (AMP and OOOF being two). The Commission spent a significant proportion of 2018 hearing testimony from a range of witnesses, including those from the financial sector (the banks and financial providers), business lobby groups (Australian Bankers Association), consumer and support organisations, law enforcement agencies (ASIC and APRA) and affected consumers. The media reported some extraordinary admissions and findings. In the end, however, many commentators expressed disappointment with the final report of the Commission, seeing it as a damp squib. The market also apparently perceived the report as weak compared to what was anticipated, with bank stocks rebounding in price and demand for the trading days after the release date of the report.

The major findings of the Commission were as follows some resulted in promises by the Commonwealth Government to act on the findings and recommendations:

• That ASIC and APRA consider criminal charges against organisations linked to the fees for no service practice (but no organisations were named)
• That ASIC oversee the superannuation sector
• That APRA and ASIC be empowered to impose civil penalties for breach of superannuation regulation (along with other modifications)
• That a national farm debt mediation scheme be established
• That a last resort compensation scheme for consumers and small business be established
• That APRA and ASIC enforce via penalty regimes and legal action rather than issue of infringement notices
• That ASIC and APRA be scrutinised by a regulator-oversight body
• That mortgage brokers be paid a fee/levy by customer, not financiers
• That car dealers be limited in add-on: financial packages they could sell

1. Why was there pressure exerted on the Federal Government to have a Royal Commission?
2. What arguments did the Government and Financial Services Sector use to reject the call for a Royal Commission?