Banking royal commission overhaul delayed due to coronavirus

author-avatar By on May 08, 2020
Banking royal commission overhaul delayed due to coronavirus

 Image: Treasurer Josh Frydenberg (Source: Twitter)

The federal government has hit pause on the implementation of the banking royal commission recommendations for six months due to COVID-19.

Treasurer Josh Frydenberg made the announcement on Friday, saying the deferral will enable the financial services industry to focus on responding to the coronavirus economic crisis.

"The deferral will enable the financial services industry to focus their efforts on planning for the recovery and supporting their customers and their staff during this unprecedented time," he said in a statement.

Two rounds of legislation were due to be implemented this year - the first in July and the second in December.

"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," Mr Frydenberg said.

Under the updated timetable, measures slated to be introduced in June will now be introduced by December 2020.

Those measures originally scheduled for introduction in December will now be introduced by June 2021. 

Mr Frydenberg said the government had implemented 24 commitments and had made substantial progress on a further 35 through consultation and the preparation of draft legislation.

Consumer Action CEO Gerard Brody said the delay of the reforms wasn't a surprise.

"We appreciate that the fallout from COVID-19 has forced the Government to drastically change its priorities and focus in the short-term. We consider a six-month deferral of these much-needed reforms a sensible compromise," Mr Brody said.
 
"Any further delay creates a greater risk that progress towards these reforms will be lost and consumers – particularly those most vulnerable – will continue to suffer."

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
Fixed 2 Years 70% LVR
2.19% 2.56% $1,517 Go to site
2.59% 2.55% $1,599 Go to site
Budget Home Loan OO P&I
2.68% 2.74% $1,618 Go to site

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 03 August 2020. View disclaimer.

More to come

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Emma joined Savings.com.au as a Finance Journalist in 2019. She is a journalist with more than five years experience across print, broadcast and digital media, with previous stints at Style Magazines, 4ZZZ radio, and as editor of The Real Estate Conversation. She's most passionate about improving the financial literacy of young women and millennials by writing about complex financial topics in a way that's easy for the average Joe (or Jill) to understand. When she's not writing about finance she's watching Greys Anatomy (again).

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