The federal government could instruct the corporate regulator to hold an inquiry into the banking and financial sectors as a way of heading off momentum for a royal commission.
Treasurer Scott Morrison released a fact sheet on Tuesday that compares the powers of a royal commission and the Australian Securities and Investment Commission.
Highlighted in bold and underlined is that “ASIC can be directed by the minister to commence an investigation in the public interest”.
Any inquiry would need to come with more money for ASIC as its chairman warned budget cuts had limited its ability to conduct proactive surveillance.
But ASIC chairman Greg Medcraft insists his agency is pursuing the misdeeds of the nation’s big banks.
“No one can say we’re not afraid of taking on a big fight,” he said on Tuesday.
ASIC has been thrown unintentionally into the row over a Labor plan for a royal commission into the banking and financial sectors.
The government argues ASIC already has the powers of a royal commission, while banking regulator APRA is also a tough cop on the beat.
Mr Medcraft, who would not be drawn into the debate, said ASIC had the power to request documents, compel witnesses, receive metadata and conduct searches.
As well, it could take action, unlike a royal commission.
“Not only do we have the power to investigate, we have the power to prosecute,” he said.
Mr Medcraft admitted trust in the system had been “somewhat dented”, but pointed to investigations into the actions of Westpac and ANZ as examples of ASIC pursuing the banks.
Opposition Leader Bill Shorten seized on “ruthless” budget cuts, saying the government wasn’t serious about doing anything about a string of bank scandals.
A royal commission would be able to look at systematic issues, unlike ASIC, he said.
Prime Minister Malcolm Turnbull believes it is up to ASIC to ask for more resources, telling reporters in Perth the government had given regulators greater tools to deal with wrongdoing.
Shadow treasurer Chris Bowen defended Labor’s decision not to back a Greens motion for a royal commission in 2015, before last week announcing it would hold one.
“Labor at that time was still considering its position,” he said.
Cabinet minister Josh Frydenberg said the government, unlike Labor, had adopted a consistent position against a royal commission.
“Suddenly we’re on the eve of an election and the populist politics reigns supreme with Bill Shorten,” he said.
Despite some backbench concerns about the government’s position, Mr Frydenberg denied it was a “captain’s call” by Mr Turnbull.
Mr Morrison later told reporters in Perth he would meet ASIC later this week.