Opinion is divided regarding ALP leader Bill Shorten's call for a royal commission into Australia's financial services industry, should the party win the next election.
Industry Super Australia (ISA) believes the call for a royal commission is justified, saying the lack of community trust and confidence in 'scandal-prone' banks could infect public confidence in their lines of business in compulsory super.
"A royal commission will have to consider how broadly and deeply unethical conduct exists in their vertically integrated businesses, including their involvement in managing hundreds of billions of compulsory super savings on behalf of millions of Australians," an ISA statement said.
"Given compulsory super is a central piece of Australia's long-term economic and social policy, on balance, the answer may be to structurally separate banks and super."
Principal of law firm Maurice Blackburn Kim Shaw said the royal commission is a long overdue, necessary and welcome measure.
"The personal costs of the industry's behaviour for people affected - many who are highly vulnerable, under significant financial pressures or very unwell - cannot be overstated," he said.
"It is absolutely critical that all sides of politics support this Royal Commission."
However, the Australian Bankers' Association (ABA) believes a royal commission is unnecessary and a waste of taxpayer funds.
ABA chief executive Steven Munchenberg said it would have international ramifications for Australia.
"Banks are particularly concerned that a call for a royal commission will send alarm signals to international investors about Australia at a time of global volatility," Mr Munchenberg said.
"Australia's banks are already highly regulated. Banks have also just contributed to a comprehensive review of the financial system and are now implementing recommendations from the Financial System Inquiry to ensure the integrity of the system into the future."
Mr Shorten said that many Australians have suffered through the decisions of banks and financial institutions.
"Retirees who have lost their retirement savings, small businesses who have lost their livelihood, Australian families who have lost hundreds of thousands of dollars, life insurance beneficiaries, denied justice and legitimate claims," he said.
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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