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.

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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 2020. 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 2020) 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, Performance Drive 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.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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