- The Treasury has announced it will delay two key deadlines for financial services reform due to the coronavirus.
- On Friday, it said it had pushed back the implementation of key measures recommended by the Hayne Royal Commissions by six-months apiece.
- It gives Australia’s banks and financial service providers some breathing space as they tackle enormous customer demand for hardships measures.
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A day of reckoning for Australia’s banks and financial services sector has been put in the too-hard basket for the minute.
On Friday, just minutes after the federal government had filled column inches with its plan relaxing its restrictions on individuals and businesses , Treasurer Josh Frydenberg quietly released a statement.
“The Morrison Government has today announced a six-month deferral to the implementation of commitments associated with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry as a result of the significant impacts of the coronavirus,” the statement from Treasury read.
In doing so, the Treasurer pushed back the two banking royal commission deadlines that were set for June and December, back six-months each. He promised the deferral would help the sector in “planning for the recovery and supporting their customers and their staff during this unprecedented time”.
While it’s unclear why Treasury decided to reveal this decision on a Friday afternoon just after a long-anticipated National Cabinet review, it did justify the delay.
“This announcement today balances the need to implement the recommendations of the Royal Commission with the need to ensure our financial institutions are in a position to devote their resources to responding to the significant challenges posed by the coronavirus,” it said.
The Morrison government, which once dismissed the royal commission as a ‘populist whinge’, says it has legislated 24 measures and claims it has “substantially progressed” 35 others.
It comes amid unprecedented customer demand for hardship measures, from freezing home loan repayments to seeking credit card debt relief. With banks now stretched juggling what’s expected to be a sharp spike in bad loans and an effort to shore up their capital positions, the government has its reasons for the move. Certainly, the major banks wisely appear to be using this ‘team Australia’ moment to rescue their images.
However, given the magnitude of what the financial services royal commission uncovered, they’ll need to seriously tackle the issue of reform by their next deadline if they’re to maintain any goodwill at all.
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