In political terms, it’s hard to fault Labor’s call for a Royal Commission into the banking system. It’s a neat riposte to the government’s Double Dissolution trigger, the ABCC bill derived from the Royal Commission into trade union corruption, which spent $100 million to announce that it had discovered a handful of cases of petty corruption*, claimed to be “the tip of the iceberg”. (That was one of a string of Royal Commissions set up as political vendettas by the Abbott government, none of which found anything useful.) The hypocrisy of this effort, when we are daily bombarded with evidence of corruption in business, finance and the LNP itself is obvious, and the proposed Commission provides a convenient political hook. And doubtless there will be plenty of evidence of individual wrongdoing, real or alleged.
However, I don’t think this proposed Commission will be any more useful, in practice, than Abbott’s. The problem with the banks is not so much breaches of the rules but the rules themselves. What we need is another inquiry which, unlike the Campbell, Wallis and Murray inquiries is not run by advocates of financial deregulation.
The Royal Commission we should really have is one into Abbott’s Royal Commissions, taking the same nakedly political approach as those Commissions did. The Commissioners, the counsel assisting and the government ministers who called the Commissions should be questioned on the political understandings with which they approached the job, the waste of public money involved. With luck, that would deter any future use of Royal Commissions as partisan vendettas, and leave them to inquire into real issues of public concern, where the powers of Royal Commissions really are necessary.
Finally an observation and a question: Having been critical of the TU Royal Commission, I’ve tried to be consistent in the prediction that this one will be similarly ineffectual. Did any of those now arguing that we don’t need a Royal Commission into banking make the same observation about TURC?
* As far as I know, no union offical has yet been convicted of a corruption offence as a result of the Commission’s work, while at least four prosecutions have failed or been dropped. My guess is that the total number of convictions will end up below 10, and the total amount of money involved not much more than a million dollars. That’s a pretty appalling return for $100 million of public funds that could have been used to protect the community against armed robbers and burglars, not to mention white collar criminals.
John Quiggin 
As a wider analysis, the “Bringing them home” report might be a useful example. But as a counter-example, the deaths in custody report came from a royal commission and that was quite a radical document in many ways, and produced some excellent recommendations that went well beyond tweaking the existing system.
I don’t think it’s the nature of the government body that does the work that’s the problem – it’s the people setting it up, and selecting whoever is to do the work. In cliche “Yes, Minister” fashion, if the whole thing is set up from day one to produce a particular outcome it doesn’t matter what label goes on the front of the report.
To take a hint from fiction, the “Imperial Auditor” of the Vorkosigan Saga would be a better model… if we had a society capable of supporting it (think the inquisitorial legal system as applied to “what’s gone wrong with this bit of our government”). Give someone the power to do all the nasty things that the ABCC has, tell them to work out what’s gone wrong, find a range of solutions, and explain why the one they like is best.
I’ve amended the title to acknowledge that Royal Commissions into genuine issues of public concern can be useful, although often they are not. As well as partisan vendettas and inquiries with a preset agenda, there’s the class of inquiry set up to take the heat off a government in trouble, in the hope that the issue will have gone away by the time the report comes down.
I reckon an RC into the banks will be as big a waste of public money as the ABCC was. If it focuses on institutions and policy, well everyone already knows the issues. If it goes gunning for personal corruption I think it will find no more of than the Heydon RC did. Personal corruption is simply not the main issue about Australian banking, any more than it is about Australian unionism.
One of the things about the Heydon commission that makes us all think it was a hatchet job (if an unsuccessful one) was the way it deliberately blurred the distinction between a structural issue – elected union officials trying to enrich their electorate by playing hardball – and such officials playing hardball to enrich themselves (of which there was remarkably little evidence). As with the banks, the two should be kept separate.
@Moz of Yarramulla
You don’t need a fictional model — there’s a real-world model in the classical Athenian practice of ‘euthyna’ (‘straightening’). Every public official leaving office had to submit to examination by a board of ten appointed by the Council, which could investigate any objections into the official’s conduct in office.
There are two issues I think:
The first is personal corruption. We say there is little in politics – but what evidence do we have? Eg, behaviour over Tampa, Iraw, pre election shenanigans involving Ashby and Slipper. There’s smokr there and the press doesn’t care for partisan reasons. Even to a degree NBN policy is somewhat corrupt in an improvable way. So I think you need state investigative organs like ICAC which are all’powerful, do not need to report to parliament except yearly and don’t need to bear a huge evidentiary burden. If there’s the appearance of corruption, you’re out. They should investigate 100% of complaints to state bureaucracies like the fuzz, and have a flying squad that can investigate anyone for any reason. Then you have a federal one with skkilar powers and an even bigger flying squad.
But then you have the ad hoc royal commission problem. As everyone knows, RCs are as likely to fail and recommend useless guff as they are to succeed. Eg, the various investigations of defence procurement. BUT is there a better eay?
J-D: you’re right. In the end the problem is that we’re asking the government to find someone who can tell that very same government that they’re being idiots. Normally a change of government sorts that out “it was them, and we’re fixing it”. But when the cost of the fix is lots and lots of unhappy voters, democratically elected governments are inherently unable to fix the problem. Voters are all too willing to shoot the messenger.
In a way, what we need is a report saying “dear voters, you have been very, very silly and this is going to hurt”.
Many of the charges have failed to make headway; either due to statute of limitations or being unable to prove the case beyond reasonable doubt.
It’s almost as if TURC was designed to fail – there is no doubt that the unions are involved in corrupt activities as are the principals and head contractors. It’s in the nature of the beast, trying to bring order to a chaotic assemblage of competing interests and factors.
Well, I for one can’t fault the call for a Royal Commission into the banking system. I am in favour of broadening it into a Royal Commission into Finance and Business Corruption. There’s already plenty of evidence around that such exists in a widespread fashion in Australia and it might well be systemic. I don’t think we can prejudge the outcome of such a Commission. Therefore it should held. For justice to be done, justice must be seen to be done and applied equally. If Trade Unions are investigated then equal and equally visible justice demands that finance, capital and bosses be also investigated.
On top of that, an inquiry should be run as well, along the lines J.Q. suggests. Royal Commission costs and inquiry costs are not all that high in the scheme of things. Heck, we could pay for it by stopping our inhumane and strategically pointless bombing campaign in the M.E. and still have large savings to spare for renewable energy infrastructure.
I totally agree with the concept of a RC into Abbott’s perversion of the legal system, especially the effort put into the humiliation of Julia. I shall never forget that photo of her leaving the Commission. His blatant use of political, to the point of nonsensical, appointments could also be looked at.
@Moz of Yarramulla
I don’t think a change of government does fix it. Partisans of a departed government will insist that criticism of it by a new government are partisan: if an incoming Labor government announces that the previous Coalition government stuffed things up, Coalition supporters won’t accept it, and if an incoming Coalition government announces that the previous Labor government stuffed things up, Labor supporters won’t accept it. If there was a standing body with a continuing responsibility for performance auditing at the highest level, perhaps it would swing more weight. Personally I would love to see every outgoing Cabinet member, and especially every outgoing Prime Minister, compelled into the witness box to undergo cross-examination: ‘Now, you have testified that the reason you did X, Y, and Z when you were in government was because they were going to improve the country’s well-being [or prosperity, stability, security, efficiency, competitiveness, fairness, sustainability]. So, tell us, did these improvements materialise? Are we in fact better off [more prosperous, more stable, more secure, more efficient, more competitive, fairer, more sustainable] as a result of what you did?’
I have 2 points to make about Royal Commissions.
1. Abbott’s blatantly political Royal Commisions have tarnished the Royal Commission process, which is a shame because the Royal Commission into Child Sex abuse is vital to purge this nation of a great stain on its history.
2. Royal Commissions are used for inappropriate purposes. In Victoria we had a Royal Commission into the Black Saturday Bushfires, which was ill suited to the judicial method and more suited to a scientific method. This is the point you’re making re the proposed banking Royal commission: get some lawyers together and you might catch a few crooks, but a new batch will emerge sooner later. We need a wide ranging review, similar to the Henry Tax Review, into financial services (even though the government binned the Henry Review).
Rog is certain that
there is no doubt that the unions are involved in corrupt activities
But this didn’t lead to convictions because in some of the cases the prosecuters were
unable to prove the case beyond reasonable doubt.
But… how can this be? There is no doubt, and we can still believe that there is no doubt despite the lack of convictions because, in part, there still remains doubt. The findings that doubt exist justify our certainty.
… eh?
@Collin Street Because the prosecutors are unable to provide sufficient evidence.
But the prosecutors have access to more evidence — a proper superset, since you can tell the prosecutors your evidence — than you have. And they’re trying to reach a lower standard, too: you claim “no” doubt, and the prosecutors only have to reach “no reasonable doubt”.
If I take a pile of rocks A and discover that we can’t pile it up to reach ledge X — and we do know that, the courts have told us that — then I, we, know that your smaller pile B can’t reach higher ledge Y. That’s just how the maths works.
Which is to say: if there were “no” doubt, and there were evidence establishing “no” doubt, then the prosecutors would use this in a court to establish “no” doubt and there would be convictions.
If A [evidence exists establishing “no doubt”] implies B [there are convictions], and we don’t have B, then we don’t have A either. Basic logic, you know.
There’s no realistic way the universe can be that means you have the evidence you claim you have. You cannot but be mistaken.
All the incentives under the neoliberal/shareholder primacy model are for unethical behaviour if it makes a buck and illegal behaviour where the perpetrator won’t feel any consequences. We have seen the Wall Street banks pay tens of billions of dollars to avoid prosecution either as institutions or of individual executives. Until regulations address the incentives the problems will persist.
Viewng it all from a distance, is a person wrong to wonder if Australia is an exampler of the West in general, deteriorating from mere neolib and conservatism to the irrational and psychotic knee jerk inner world of reactionary modernism?
The GG today might have been an instructive example, the boorish snubbing of Tanya Plibersek was no accident but the action of a paranoid well dislocated from reality.
To state the obvious, Turnbull’s PMship has been so pathetic in large part because he is unable to escape the carcass of the LNP Abetz / Andrews / Bernardi right-wing. I do not include Abbott in this faction because he has no personal will or volition of his own. Abbott only finds raison d’etre in being the public face of someone else’s agenda. He’s a kind of Richard Nixon in that way. A messenger boy, a grocery clerk (ack: Apocalype Now)
Malcolm needs to win the election in order to establish his own credibility as a winner within the LNP and so gain the internal political capital to purge the remainder of the DelCons and fully inaugurate the Glorious Age Of Malcolm including Carbon Pricing, Marriage Equality and other Malcolmesque things.
MT needs to go to the election NOW because on trend he will become unelectable within three months.
So, Turnbull is hoping for a narrow election victory, following which he will purge the Right Faction and start actually doing some PMing. He will have three years to repair the damage of The Right’s subsequent and immediate hysterical hatred and revenge (already visible and active).
BTW can anybody recommend a good regular Australian Political Blog similar to the old Lavatus Prodeo ?
Abbott acted so as to bring an unnatural darkness upon the processes of government. History should note his infantile behaviour of hitting his political enemies with publicly funded fishing expeditions, and his pathetic habit of using positions of public office as paddocks for putting ex-ministers out to pasture, to the extent that he fired existing office holders (put there by some previous government) just because they were given the job by the enemy, i.e. the ALP. No allowance made for the neutrality of the previous appointment, just a kick in the pants and an FU on the way out.
Let’s just put some historical footnote that records the nasty petty vindictive political nature of this man, and leave it at that.
Labors pink batts scheme resulted in several deaths (due partly to misplaced trust in free markets) and so warranted a Royal Commission .Does that mean that if the Coalitions changes to trucking industry wages lift the death toll there should be another? .Also their plebiscite on marriage equality will lift suicide rates. In these cases they are being fore warned .Lots of government decisions affect death rates.
@Jimmy
Royal Commissions are not required to operate in a manner similar to judicial proceedings or to have objectives anything like those of judicial proceedings. Consider, for example, the Royal Commission into Australia Government Administration, chaired by HC Coombs (not a judge or lawyer, note). There’s no reason why a Royal Commission could not be chaired and staffed by scientists and run as a scientific inquiry. Governments don’t tend to do that, but there’s no reason why they can’t if they want to.
@Collin Street
It is often the case that there is no doubt that a crime has been committed but there is insufficient evidence to prove the guilt of any specific individual.
@J-D
Good points. Always pleased when I can agree (again) with a person I often disagree with. 🙂
It is often the case that there is no doubt that a crime has been committed but there is insufficient evidence to prove the guilt of any specific individual.
So there’s no doubt that crimes have been committed.
Can you tell me what some of these crimes are? I mean, you know beyond doubt that these crimes happened, so presumably you know what they are and can share this information with me.
JQ, I can see why you lump the Campbell and the Wallis reports together regarding aiming for deregulation. But why do you include the Murray report?
To the best of my knowledge, both Campbell and Wallis are based on the presumption that all that is required is disclosure, leaving everything else to ‘the market’. The Murray report departs from this presumption.
John Hewson argued tonight on Q&A that the incentive structure in the banking sector is inappropriate (bonus payments, etc). Yes this is a factor and, judging from some of your past posts, you would agree. But this problem is not limited to the banks. It is a problem entrenched in what is now referred to as ‘corporate culture’, which has been adopted by some universities, too.
The term ‘corporate culture’ is not helpful. It is corporate law which is the problem, IMHO. But this topic is for another day.
@Ernestine Gross
It would be interesting, if you felt so inclined, to see your thoughts on corporate law posted in a Weekend Reflections post when JQ opens same from time to time. I know that every time I want to understand your ideas I attempt to inveigle you into long, time-consuming essays. You’d have to want to write it for better reasons than just my request.
Wikipedia tells me:
“Corporate law (also “company” or “corporations” law) is the study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community and the environment interact with one another. Corporate law is a part of a broader companies law (or law of business associations).”
It occurs to me as a throw-away thought at this stage that we need “Social Law” not “Corporate Law”.
@Collin Street
I (deliberately) did not write that this particular case is a case where there is no doubt that crimes have been committed; only that such cases do exist, and that it’s not (as you suggested) self-contradictory to say that there’s no doubt that crimes have been committed and to say that there is doubt about the guilt of any/all particular individuals.
But since you raise the point, my experience of human beings suggests to me that the probability of there being no corrupt/dishonest people in any given line of work is vanishingly small. I would say this about any occupational category: accountants, butlers, carpenters, doctors, engineers, pharmacists, politicians, police officers, priests … anything you care to name. For any occupational category you can name, there is no doubt in my mind that some people in that line of work are corrupt/dishonest, even if I have no idea which ones. Therefore there is no doubt in my mind that some trade union officials are corrupt/dishonest. I don’t think they’re more likely to be so than people in other lines of work, and I don’t think this universal assessment of human beings justifies a Royal Commission.
@J-D
I agree. The universal assessment of human beings, that some in all lines of work will be corrupt/dishonest, does not in itself justify a Royal Commission into any organisation, trade or business. However, this does not exhaust the possibilities. As well as the possibility of individual corruption/dishonesty there is the possibility of connected or systemic corruption/dishonesty. This latter possibility, if there is evidence for it, could justify a Royal Commission into any particular organisation, trade or business.