HomeGovernmentFederal BudgetBacking up claims to fix banking

Backing up claims to fix banking

“I love Budget day,” senior economist Matt Grudnoff told YourLifeChoices. “It’s like Christmas to an economist.”

You’d be forgiven for thinking that it was just the numbers that tickle Matt’s fancy, and you’d be right to an extent.

“It’s like getting new toys to play with,” he said.

But the real reason he loves Budget day is because “it’s the one day of the year that you get to see if a politician really cares about something”.

“A politician can say they care about something or will do something about a certain issue, but until you see the money, their promises aren’t real. On Budget day, you get to see them put their money where their mouth is.”

As soon as the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was over, the Government – to its credit – pledged to take action on all 76 recommendations made in the commission’s final report.

Yesterday, it put its money where its mouth is.

So, it has set aside $606.7 million over five years to back up its claim. Part of the money ($2.6 million over two years) will go towards designing and implementing an industry-funded compensation scheme of last resort for consumers and small business. Another $30.7 million will be used to pay compensation to consumers and small businesses with unresolved and unpaid legacy disputes.

Over $404 million will be handed over to the Australian Securities and Investments Commission (ASIC) to “implement its new enforcement strategy and expand its capabilities and roles in accordance with the recommendations of the royal commission” and a further $145 million goes to the Australian Prudential Regulation Authority (APRA) “to strengthen its supervisory and enforcement activities which will support its response to key areas of concern raised by the royal commission, including with respect to governance, culture and remuneration”.

Money has been set aside to establish an independent financial regulator to oversee both ASIC and APRA to make sure the aforementioned money is well spent.

Do you give the Government credit for backing its claims to take action on the banking and finance sector?

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