The beginning of the end game
Australia’s part-time federal parliament resumes next week, with just 10 sitting days scheduled before an election in May. To say the government is running scared would be an understatement. Equally, to say Labor is calmly in cruise control is wrong. The frontrunning opposition is nervous it could slip up, despite the fact it’s the Coalition that has been in panic mode, making mistakes at every turn so far this year.
The prime minister attempted to calm his worried MPs on Tuesday night. For the first time since 1929, they face the prospect of a government defeat on the floor of the house of representatives on a substantial bill. Back then the prime minister of the day immediately advised the governor-general to call an election. It is a precedent Scott Morrison says he will not follow.
Speaking to a lime-suited Alan Jones on one of Sky News’s after-dark shows, the PM was defiant. “If we lose that vote next week, so be it ... I will simply ignore it,” he said. “We can’t be going off to the polls. The election is in May and we will get on with the business.” Jones and his co-host, Peta Credlin, were worried Morrison’s letter to Bill Shorten, which offered to set up a government-appointed medical transfer clinical assurance panel to vet the proposed transfer of sick refugees from Manus and Nauru, was merely a compromise to avoid defeat.
Morrison assured his urgers he was up for the fight, showing the machismo of a heavyweight pugilist. “Good on you,” responded Jones. “That will hearten your supporters,” was Credlin’s view. Mightily encouraged, a pumped-up Morrison started shouting and jabbing his finger at the camera, “Bill, it’s on your head. You vote against it. You break it, you own it.”
The Morrison olive branch did not impress independent Kerryn Phelps, whose own refugee medical transfer bill will come into parliament on Tuesday as amendments to a government bill tacked on by the senate. This means, under the practice of the house, the government has no choice but to put it up for a vote. It also means that even if Queensland independent Bob Katter votes with the Liberals – but the rest of the crossbench vote with Labor – Phelps’s bill will become law.
Phelps welcomed the weekend’s announcement that the final four children and their families held on Nauru were heading to the United States. She’s unimpressed, though, by the Morrison offer, while fellow crossbencher Cathy McGowan is yet to show her hand. McGowan says she’s consulting her constituents, who in the past “have consistently called for compassion and mercy for refugees”. The retiring independent is under enormous pressure in the lead-up to the vote on Phelps’s bill. “It’s the biggest voting decision of her parliamentary life”, is the view of one government MP. But Morrison’s assurances he won’t take defeat as a trigger for an immediate election may encourage McGowan to keep putting humanity ahead of her previously stated desire to see the parliament run its full term.
Some Liberals believe Labor may end up accepting Morrison’s medical panel offer as a way to get the issue out of the headlines. Border protection – in its many guises – plays better for the conservatives, although public opinion has clearly shifted against indefinite mandatory detention in light of the damage it does to the mental and physical health of innocent men, women and children.
Shadow immigration minister Shayne Neumann sees the panel offer as a backdown from the PM. He quotes Morrison’s defiance when the senate backed the Phelps proposal. Then, Morrison said: “I will never move from where I stand on this issue.” Shorten says he will work with the crossbench and talk to the government. But a key Labor strategist says that unless Morrison’s proposal matches Phelps’s plan in outcome, the opposition won’t support it.
Morrison’s hyperbolic warning – that any show of compassion to the 1000 or so refugees still holed up on Manus and Nauru will destroy the border protection regime and lead to a new influx of boats – is of the same genre as his repeated warnings against a banking royal commission. And while he can chalk up “stopping the boats” as an achievement, the government’s handling of the banks is an entirely different matter.
As the week progressed from the crass media management surrounding the release of the Hayne report, the early gloss of the commission faded fast. The government’s reluctance to allow all accredited gallery journalists into the media lock-up baffled and angered many. The three commercial TV networks were restricted to three personnel each – producers, camera operators and graphic artists were barred. The excuse was that there was no space – a thin cover that betrayed the government’s sensitivity to its record. The entire wing of committee rooms can be closed off easily, as it is for the annual budget.
But nothing could hide the compelling evidence of witnesses before the royal commission, nor that the conclusions drawn by Kenneth Hayne of greed, criminality and nefarious behaviour fell well below community expectations. With Morrison nowhere to be seen, Treasurer Josh Frydenberg was left to face the music alone. Even though Frydenberg had joined the government voting against a royal commission 26 times, he never slammed Shorten for demanding one. Certainly not as “a political exercise for a political hack” or nothing more than a “populist whinge”. Morrison even petulantly described the royal commission as “regrettable but necessary”. He said: “It’s regrettable that the politics, principally with the politicking of the opposition, led to this.”
But the prime minister was involved in some subterranean politicking of his own. Freedom of information documents obtained by the Australian Council of Trade Unions show Morrison, as treasurer, worked closely with the heads of the big banks in the days before he reluctantly announced the inquiry.
NAB chairman Ken Henry, a former Treasury head whom Commissioner Hayne singled out in his report this week, saying, “I am not as confident as I would wish to be that the lessons of the past have been learned,” sent Morrison a draft of the statement the Big Four bank bosses intended to release, giving the green light for a royal commission. It outlined terms of reference and time lines that would best suit them. Their recommendations were for a short inquiry with “thoughtfully drafted” terms of reference that “reports back in a timely fashion”.
ACTU secretary Sally McManus said that, in light of the underwhelming final report, the letter raised serious questions. “Would a longer, better-resourced inquiry have exposed even more deeply entrenched wrongdoing and recommended greater reforms?” she asked. Certainly, whistleblower Jeff Morris, who destroyed his career to expose the behaviour at Commonwealth Bank and the abject failure of the Australian Securities and Investments Commission, thinks so. He told The Business on ABC TV that we got a “quick and dirty royal commission ... you don’t get that weight of evidence that leaves the condemnation beyond any doubt at all”.
Professor Elizabeth Sheedy, a banking risk expert at Macquarie University, told ABC Radio she was disappointed with the royal commission. She conceded that there was a vague mention of criminal referral “but no one’s named”. She said, “This in itself is quite extraordinary. I would have thought it fairly normal for royal commissions to name names. The taxpayers who funded this royal commission have a right to expect that.”
In his report, Hayne wrote a powerful essay on the ethics of banking, the failures that were prompted by rewarding staggering misconduct and elevating greed above serving customers. But he has left it to ASIC and the Australian Prudential Regulation Authority to follow up on the 24 references for possible prosecution. These are the very regulators he found completely wanting.
He is calling on them to be properly funded so they can carry out the task. It’s here the government is complicit in the failure, despite its claims it has been acting from the day it was elected in 2013. In its first five years it ripped $200 million from the regulator’s budget, causing 200 lawyers and other staff to be sacked. It is now playing catch-up and boldly claiming leadership.
Economist and former Coalition staffer John Adams says the royal commission was “a whitewash”. He says it did nothing to change anything, leaving in place the “moral hazard” of not demanding the Big Four be forced into structural separation of their lending and advice arms. Adams points out that it was the same sort of malpractice on display in our banks, especially in credit practices, that led to the global financial crisis of 2007-08.
Wayne Swan, the treasurer at the time of the GFC, agrees and says people did not see that justice was done to the banking executives and boards that blew up the US financial system, throwing millions out of work. In Australia, thousands of ordinary people have lost their jobs, businesses and homes. Justice demands these executives and directors be held to account.
During the week, Malcolm Turnbull admitted he got it wrong: the royal commission should have been held 18 months ago. It was an admission that will hurt Morrison, as he faces an election, far more than it will hurt Turnbull in his vengeful retirement.
This article was first published in the print edition of The Saturday Paper on February 9, 2019 as "The beginning of the end game".
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