Hayne Royal Commission

Hayne Royal Commission
Name	Hayne Royal Commission
Type	Royal commission
Commissioner	The Hon. Kenneth Hayne
Jurisdiction	Australia
Established	2017
Reported	2019
Outcome	Recommendations for financial services reform

Hayne Royal Commission The Hayne Royal Commission was a major Australian inquiry led by The Hon. Kenneth Hayne into misconduct in the banking, insurance and financial services industry. It examined conduct by major institutions such as Commonwealth Bank, National Australia Bank, Westpac, Australia and New Zealand Banking Group, AMP Limited, and considered evidence involving regulators like Australian Securities and Investments Commission, Australian Prudential Regulation Authority and the Reserve Bank of Australia. The commission’s work intersected with public debates involving figures from Malcolm Turnbull to Scott Morrison and implicated corporate actors including Grant Samuel, Cbus, and law firms such as Clayton Utz.

Background and establishment

The commission was announced by the Turnbull Ministry in response to a series of investigations and scandals including the Royal Commission into Institutional Responses to Child Sexual Abuse-era expectations about accountability, media reports from outlets such as The Sydney Morning Herald, The Australian Financial Review and ABC News (Australia), and findings from parliamentary inquiries like those conducted by the Senate Economics References Committee. It followed earlier regulatory action against entities like Centrelink, Myer, and insurers such as QBE Insurance and was informed by international precedents including the Financial Crisis Inquiry Commission and inquiries into Wells Fargo practices. The commission was established under the Royal Commissions Act 1902 with terms set by the Governor-General of Australia.

Terms of reference and scope

Commissioner Hayne was directed to inquire into misconduct in the banking, superannuation, insurance and financial services sector, including practices at institutions such as AMP Limited, Macquarie Group, Suncorp Group and Bendigo and Adelaide Bank. The terms referenced statutory frameworks including the Corporations Act 2001, National Consumer Credit Protection Act 2009 and the role of regulatory agencies including ASIC, APRA and the Australian Competition and Consumer Commission. The scope allowed examination of consumer outcomes involving products sold by entities like IOOF and Perpetual Limited, and practices connected to intermediaries such as mortgage brokers, financial advisers and trustees of funds like AustralianSuper.

Hearings and key evidence

Public hearings featured testimony from executives at Commonwealth Bank, Westpac, NAB, ANZ, AMP Limited, and advisers associated with BT Financial Group and Insignia Financial. Witnesses included former leaders and directors from AMP Limited and CBA as well as whistleblowers and complainants represented by legal teams from firms like Gilbert + Tobin and Allens. Evidence highlighted issues in areas regulated by ASIC and APRA, probed the conduct of auditors from firms such as PwC, KPMG, Deloitte and EY, and examined links to superannuation trustees including REST and Hostplus. Hearings explored issues raised in reports by Hayne predecessors and commentators like Ian Ramsay and John T. Bates and engaged expert witnesses from academic institutions such as University of Melbourne, University of Sydney and Monash University.

Findings and recommendations

The commission delivered a comprehensive report finding widespread misconduct across institutions including Commonwealth Bank, ANZ, NAB and Westpac, and notable failures at AMP Limited and advice networks linked to IOOF. Hayne recommended reforms to the oversight role of ASIC and APRA, changes to the Corporations Act 2001 and recommendation for a statutory duty such as a best interest duty modeled against precedents like the Fiduciary duty and elements seen in United Kingdom reforms after Payment protection insurance scandal. Specific recommendations included compensation frameworks for customers of banks and insurers, reform of remuneration practices tied to financial advisers, and enhanced enforcement powers for ASIC.

Government and industry responses

The Morrison Government and opposition leaders including figures from the Australian Labor Party and the Australian Greens responded by committing to varying degrees of the report’s recommendations. Major banks including Commonwealth Bank, NAB, ANZ and Westpac issued public apologies and set aside provisions for compensation, while industry bodies like the Australian Banking Association, Financial Services Council and Insurance Council of Australia undertook internal reviews. Legal practitioners and accounting firms such as Herbert Smith Freehills, MinterEllison, PwC and KPMG reviewed advisory and audit practices. Regulatory responses included announcements by ASIC and APRA about enforcement and prudential changes, and legislative responses debated in the Parliament of Australia.

Impact and subsequent reforms

Following the report, reforms targeted conduct in superannuation funds including trustees such as AustralianSuper and HESTA, changes to financial advice regulation affecting networks like Count Financial and Financial Advice Association of Australia, and strengthened enforcement tools for ASIC and APRA. Compensation schemes were established affecting customers of institutions including AMP Limited, Westpac and Commonwealth Bank. The commission influenced inquiries and policy debates involving bodies like the Productivity Commission and inspired comparative reforms in markets monitored by International Monetary Fund commentators. The report’s legacy includes increased scrutiny of remuneration, cultural change programs within big four banks, and continued legal and parliamentary scrutiny by committees such as the House of Representatives Standing Committee on Economics.

Category:Australian royal commissions