When Morrison says, Labor cannot manage money, he must deny banks large-scale 2007-2011 crises - GFC - an outcome of Liberals mismanagement of money. Incoming Labor reversed looming depression in a brilliant world-first. The myth,john-menadue-the-myth-that-the-liberals-are-better-economic-managers/P&I,relies on crucial cover**-**ups. Some are illustrated in the Financial Sector Royal Commission that Liberals restricted before it started.

Foot-dragging was nothing to Turnbulls limits against the FSRC inquiring into banks revived recklessness. Liberals will not permit a national ICACs scrutiny of its governments problems and similarly, Commissioner Haynes Terms were gifts to banks regardless misconduct and law-breaking.

A month before Turnbull and the G-G signed the Terms of Reference (ToR) for Hayne in December 2017, former CEO of ANZ Mike Smith declared when you want to get mob interest, you turn on the banks. Hitler did it.

What explains bankings self-pity and exaggerated self-regard Smiths Hitler card so like Coalition governments, against public criticism? Haynes Final Report slammed the banks for urging caution meaning Do Not Enter their abode or suggest costly (un-costed) changes to banking.

Yet Liberals Terms (close to the main banks draft to Morrison) gave the FSRC limited entry. Turnbulls preamble claims Australia has one of the most stable financial industries, systemically strong banks and the worlds best prudential regulation and oversight.Hayne was to investigate thegovernance and corporate culture of financial services; the Terms restricted inquiry to entities misconduct towards the consumer.

Hayne had to usecustomer- not the correct, disallowed term,bank client to distinguish from consumer lending for say a car. Turnbulls ToR did not define consumer; it defined entity as one that undertakes liability (to pay)of the general insurer or life insurance;banks were not defined by liability, only licence holders. Hayne was not required to inquire into macro-prudential matters; but to have regard for the economy and consumer costs. Finance entities had simplistic definitions, the consumer none.

Evidence of appalling personal tragedies created by self-governing banks prompted Hayne to ease abusive misconduct. While proposed rules are necessary, they cannot touch the core, the typically corrosive power of bank money.

This core was banished in Turnbulls ToR, namely panics to depressions created by bank money the central fact of social life.Bank balance sheets show their_liabilities_todepositors - to make these available at all times or at call. Bank_assets_are deposited loans to borrowers, whose own liability to service loans was the FSRCs focus because bank liability to borrowers-depositors was disallowed. By 2007-08, banks violated their liabilities via Costellos market discipline: meaning bank-runs. Economic and social activity faced total collapse were it not for Labor.

If we compare the ToRs disregard of banks liabilities to depositors with its task to exploregovernance and corporate_culture_, the Turnbull hobbling is clear. Whether Treasury et al_understood or not_, Haynes focus was on the borrower: the FSRC found unconscionable demands on borrower liabilities: savage treatment of defaults like foreclosures, of inability to meet interest payments; breaking of existing laws and unmet obligations of credit licensees to inquire if the loan is unsuitable for the consumer. Hayne urged that obligation be clarified and all laws be_enforced_. Turnbulls alleged worlds best, ASIC and APRA, did no enforcement.

Any debate on bankings imprudence on their side of the balance sheet was lost. Central banks used to scrutinise these. Hayne, stuck with woolly terms, still mentions earlier deregulations, removal of liability structures and CLERPs on disclosure 1997 (dear to defunct efficient market claims, in Costellos ASIC). Hayne cites a G30 2018 on Banking Culture and Conduct: a permanent mindset change. Mindset! Causesof the Great Financial Crisis banks licensed to create money assumed state bail-outs for reneging on their (swollen) liabilities (promises to pay at call), and future macro-prudential bank-runs that easily eventuate never had consideration.

As with Morrisons election claims, Turnbulls Terms_refuse the GFC_ and the FSRC duly followed. Of course, like most of us, Hayne knew, citing a RBA submission in 2014 (for PM Abbotts inquiry) that discussed Australian banks heavy exposure and cross-border runs in dangerous global assets under Costellos watch.

Given Labors sterling record, the funny part (one could die laughing) is Costello thought it a great idea to close the government bond markets to improve credit ratings, having screeched about Labors constructive spending. Bond traders were horrified. If Treasury refused to issue debt, the financial-state deal would collapse since sovereign bonds guarantee private money creation, short-term leverage and bond trading. The state that spends in its currency cannot default, unless it will not tax the top end or is falling apart. Costellos wealth-fare profligacy is still with us.

The term customer was a farce too. Hayne says service provision was relegated beneath sales those dealing with customers became sellers. No word of how banks devised shadowy financial products, which are mutual promises too, not a service like a haircut or a product like a table. Consumer Law covers all potentially unfair contracts (taking bad haircuts off individuals) but not how banks can destroy everyone, even the wealthy.

The FSRC could not investigate executive and board scheming_before_Gillards government repairing of GFC sins. Abbotts government did its best to water down her FoFA of 2012, succeeding implicitly: curb your sense of justice CEO orders (allegedly) to now CBAs CEO Matt Comyn, or when CBA breached money laundering and_terrorism_financing laws. In June 2018 CBA only paid $700 million in fines, when Austrac had set fines high enough that the state could renationalise it for free.

A state-owned bank gives strong competition, compared to more, same-old private competitors, but_only if its intelligently-run_. Monetary history reveals private banks control over the money issue created Australias 1890s Panic-Depression, then the worst (globally). It was hardly a controversy that the new Commonwealth would take over the currency legislated by Labors PM Andrew Fisher, and found the Commonwealth Bank of Australia (1912). But after the 1920s tory parties neutered it, CBA became a major cause of Australias Great Depression (as a 1934 RC showed); Labor PM John Curtin later rebuilt it. Nugget Coombs as CBA Governor gave the reasons why a state-owned bank acting as an arm with the central bank arm was so nationally constructive:see

Coombss fear postwar was to prevent deflation but not to produce all kinds of inflations. Government too must reduce its money creation when pork barrelling or warfare became inflationary. From 1949, Menzies and private banks destroyed all that, not before Menzies nearly lost office in 1960s bank-money crisis for rejecting Coombss advice. From Korea to Vietnam, Menzies refused to curb private banks inflationary consumer lending. With the 1970s rise of Wall Street, came mobile capital recalcitrance: Labor PM Hawke was the best-informed to salvage a poor situation.

Hayne coped with limited Terms. We remain bereft of evidence on banks liabilities, while their deposit guarantee fosters cheap interest on short-term IOUs. Tricks return as mismanagement in government and banking is denied. Labor is historically the most competent in office but to Liberals and friends, history is abolished. The_culture of__capitalism_must not be tempered no matter the social degradation.

Jocelyn Pixley is an Honorary Professor in Sociology, Macquarie University.