Australia’s courts will be better able to hold banks accountable for misconduct, such as the shocking cases exposed by the banking royal commission, under a $51.5 million funding boost.
The Commonwealth Director of Public Prosecutions and the Federal Court will get the extra money from the federal government, to ramp up their resources for dealing with banks alleged of breaking the law.
The funding windfall comes as the government is expecting more referrals for legal action by financial regulators such as the Australian Securities and Investments Commission, following the royal commission led by Kenneth Hayne QC.
“The royal commission has made clear that ASIC and other regulators to date have preferred negotiation over litigation,” Treasurer Josh Frydenberg told ABC Radio on Friday.
“From here on, you’ll see a more aggressive stance from our regulators and that’s to be welcomed.”
Mr Frydenberg said enabling more legal action against banks is aimed at breaking up the troubling culture identified by the banking inquiry.
“We’re absolutely focused on making sure consumers get a better outcome, and that culture of non-compliance and misconduct and putting profits before people that was identified by commissioner Hayne is brought to an end.”
The Commonwealth Director of Public Prosecutions will receive $41.6 million of the new money over the next eight years, to consider and carry out more prosecutions against financial institutions.
The Federal Court will get $9.9 million over four years to deal with an expected spike in civil cases, including by appointing two new judges.
That comes after the government in August announced ASIC would get an extra $70 million, to put corporate cops in the branches and head offices of banks and financial institutions to keep them in check.
The government has also asked the Attorney-General’s department to review whether corporate crime should come under the Federal Court’s criminal jurisdiction.
At the moment, any criminal prosecutions for banking misconduct must be heard in state courts – meaning they need to compete with other state cases for resources and scheduling.
A new committee with representatives from the various financial regulators will also be established, to regularly meet and discuss enforcement matters in the sector.
Commissioner Hayne released a scathing interim report in September highlighting an insidious culture of greed and profit over basic decency permeating the big banks.
He also took aim at regulators for cosying up to financial services firms and striking limp deals in response to systemic misbehaviour rather than pursuing tough prosecutions.