The response by the Opposition party said that 75 of the royal commission recommendations would be implemented in full and they would do so faster.
“Labor will act faster and go further than Scott Morrison and the Liberals to implement the recommendations of the banking royal commission. Labor will implement 75 recommendations of the royal commission in full,” said the release.
Opposition treasurer Chris Bowen said that Labor would fully implement the recommendations regarding insurance products and accountability measurers.
“We will fully implement the royal commission’s recommendation to end the hawking of insurance products, to ensure there are consequences when the big banks breach industry codes and to ban life insurance commissions if ASIC finds there is no clear justification for retaining them.
“Labor has already announced tough, new accountability mechanisms on the banks and regulators to ensure that a further 23 recommendations are implemented in full, as soon as possible,” he said.
The biggest announcement of Labor’s came as a relief to the mortgage broker industry with Labor moving away from accepting Commissioner Hayne’s recommendation of a consumer-paid broker model.
Commissioner Hayne had originally recommended that the borrower should pay the mortgage broker a fee for acting in connection with home lending.
Labor in its initial response said it agreed in principle to all of Hayne’s recommendations but has since come out with a new play for the broker industry.
“We will impose a fixed percentage upfront fee for brokers that will eliminate the conflict of interest that comes from different lenders offering different commission rates, while ensuring these upfront commission can only apply to the amount drawn down by the borrower, not the total loan amount,” said Mr Bowen.
Mr Bowen said that, after consultation with the industry, it was decided that this was an acceptable way forward.
“We would avoid conflicted remuneration by legislating a flat commission rate that applies to all mortgage brokers. So no longer would brokers be able to recommend a higher or lower commission based on what’s good for them because it would be flat.
“We have a clear policy and it avoids those issues of removing competition in banking because we want more competition not less,” he said.
Labor also unveiled a new package for victims of misconduct to ensure that all consumers had the ability to receive compensation.
“Labor will establish a groundbreaking victim compensation package. It’s the courage of victims who have shared their stories that has shown us the need for reform. We must ensure that these victims aren’t left behind as we clean up the sector after a decade of misconduct,” Mr Bowen said.
The royal commission is set to be one of the hot election topics, with Mr Bowen saying that Labor had supported the commission and was best suited to take its recommendations forward.
“The party that is best to implement the royal commission is the one that recommended the royal commission, the one that voted for it, the one that didn’t vote against it 26 times. A Shorten government would get on with making the banking system fairer for all,” he said.
