DEBORAH KNIGHT:
Treasurer Scott Morrison joins us now. Good morning to you.
TREASURER:
Hi there.
KNIGHT:
You and the PM want to take up gymnastics. This is a backflip of epic proportions.
TREASURER:
When events and circumstances change you have to take account of those and what had occurred since that interview is some pretty clear advice that the politics and the wrecking that was taking place and the damage that could be done to the banking and financial system was too great and the advice was that this was the least worst option and was regrettably necessary and we've taken that decision and it adds to all the things that we've already done in this area to make our banks stronger, to make them more competitive, to make them fairer and, importantly, to make them more accountable. So this is going to add to all of that and we're just going to get on with it.
KNIGHT:
So the least worst option, it's humiliating having to announce an inquiry that you dismissed as pointless and it seems you don't think is really worthwhile.
TREASURER:
You've got to act ultimately in the national economic interest and my vanity and anyone else's is not the point. The issue is, you've got to make the right decisions and we've made a lot of decisions to make the banking system stronger, more accountable and fairer but the politicking that was going on and the damage that the politics that was being done to the economy was not something that I, the Reserve Bank Chairman, the Chair of the Prudential Regulatory Authority – we formed the view that this is what had to happen now, regrettably, but it's the result of a lot of politicking on the banks and that had to come to an end because everyone's job, everyone's mortgage, all of this depends on the strength of our banking and financial system and I couldn't and the Prime Minister couldn't allow that politicking to keep wrecking that sector.
KNIGHT:
So this is all about politics, isn't it? Because you've lost your numbers, you're bowing to pressure from the Nationals, it's not about fixing the banking system, it's about bowing to politics.
TREASURER:
No, no, I disagree. No, it's about acting in the national economic interest which is what the Prime Minister and I have always done and what has occurred over the last few days was clear that a very unstructured, damaging proposal was going to come out of the Parliament – which would have hurt the reputation and standing of the banking and financial sector, which would have hurt people's mortgages, it would hurt their jobs, it would hurt loans to business – and that's not something we could allow to go on. And so, Bill Shorten has been wrecking the economy from Opposition, imagine what he could do as Prime Minister.
KNIGHT:
Will we see higher interest rates and bank fees as a result of this inquiry? The banks are warning that they'll have to pass it on.
TREASURER:
I don't believe that is necessary and I don't think that there's any excuse for that because we've taken this action to ensure that this is a very structured, focused and well-run inquiry – not some sort of political circus, that's what the Labor party wanted. They didn't have the terms of reference even for what they were suggesting and they've had two and a half years to write one and they still didn't come up with one. We have a structured terms of reference, we'll focus on everything from the banks and wealth management, superannuation funds, the big industry funds, all of that and it will give people the opportunity to have their say. But it doesn't replace the action that we're already taking, Deb, and that's important. We need to keep on with that to make the bank executives accountable through our Banking Executive Accountability Regime, the Financial Complaints Authority which the Senate could vote on right now – well, when they return next week – that's already in the Parliament and they need to get on with that.
KNIGHT:
It seems the banks aren't too concerned about what this inquiry will bring up though because they're the ones that wrote to you, on the day you announced it, calling for this inquiry – who's calling the shots?
TREASURER:
What they advised was that the constant damage that was being done as a result of the politicking was creating uncertainty and the Government needed to take action to quell that and that's what we have done. But they didn't want to see a Royal Commission for the concerns that it would have, this is the least worst option, sometimes that's the option you've got to take.
KNIGHT:
It's not exactly putting confidence in amongst voters and what's next? Are we going to see a reversal on penalty rates?
TREASURER:
No. Of course not, that's not something we're contemplating or have ever contemplated but remember what that's about…
KNIGHT:
But that's not what George Christensen wants though.
TREASURER:
The Fair Work Commission has made their decision. That was a Fair Work Commission that was set up by Bill Shorten – it's an independent tribunal, it doesn't have anything to do with the Government, they make their own decisions and that's the way those decisions should be made. If there's a failure of leadership this week, it's Bill Shorten because he hasn't sacked Sam Dastyari from the Labor party. 'Last Chance' Sam has had his last chance and Bill Shorten's weakness and not passing the test of standing up to someone who would betray his country and want to sit in the Senate is a disgrace.
KNIGHT:
Alright, Treasurer Scott Morrison, thanks so much for joining us this morning.