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Transcript of interview with Leigh Sales: ABC 7:30: Thursday 30 November 2017: Malcolm's biggest bank flip yet; Banking Royal Commission; Senator Dastyari.

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SUBJECT/S: Malcolm’s biggest bank flip yet; Banking Royal Commission; Senator Dastyari.

LEIGH SALES, PRESENTER: The Government handed Labor bit of a gift today with its Royal Commission announcement as I just pointed out right as Labor was reeling from an own goal kicked by its own rogue Senator Sam Dastyari. The Shadow Treasurer Chris Bowen joined me in the studio.

Chris Bowen, Labor has been calling for a Royal Commission into the banks. Are the terms of reference for this inquiry fit for purpose as far as you’re concerned?

CHRIS BOWEN, SHADOW TREASURER: We think they could be much better. We welcome the fact that the Government has finally relented after 18 months and agreed very reluctantly to a Royal Commission. I make this point Leigh. If the Government had not wasted the last 18 months but agreed when we first suggested it, the Royal Commission would now be finished and we would be implementing recommendations. 18 wasted months.

On the matter of the terms of reference, we think they could be much stronger. There should have been consultation with victims groups, with consumer groups. Happy for them to consult with the banks as well. But there should have been more consultation around them. Some of them are designed, it appears to be, for a political attack on industry funds. We're more than happy for superannuation to be examined by the Royal Commission.

SALES: But nonetheless, will it get to the heart of what you think needs to be gotten to?

BOWEN: I think that depends very much on the appointment of the Royal Commissioner or Royal Commissioners. We await that. We welcome consultation from the Government. It's not necessary for a Government to always consult with an

Opposition about a Royal Commission but where we've been calling for it for 18 months, it was our idea, it would be better that they consulted with us and with others about the appointment of the Royal Commissioner. We will praise the appointment if it's a good one and we will condemn it if it's a cop-out.

SALES: What about the year-long time frame, do you think it's sufficient given the size of these institutions?

BOWEN: It's ambitious but I would hope that it could be met. That's a matter for the Government and Royal Commissioner. Again, I simply make this point. 18 wasted months. If they'd accepted the reality from Bill Shorten, Mark Dreyfus and myself, when we announced Labor's position on a Royal Commission, we would be at the final stages, we would have interim recommendations, we would be getting on with the job.

SALES: You point out it's been 18 months. Labor has made a lot of mileage on this issue in that time. Isn't it sensible politics for the Government to come on board and neutralise on that?

BOWEN: What a humiliating back down. This is the backflip of all backflips. Is there anything that Malcolm Turnbull or Scott Morrison can tell you they believe that the Australian people can really solidly think they won't backtrack on at some point? This is a Government which stands for nothing. We welcome this backflip. It's a good one. It comes 18 months too late and we're not happy with the terms of reference but nevertheless it is an extraordinary back down by them. Now, they don't actually believe, the Prime Minister actually used the word "regrettable". He actually doesn't believe in this Royal Commission. That's what worries me when it comes to the appointment of a Royal Commissioner. If it's a good appointment I welcome it.

SALES: Labor's gone hard on the banks during their time as Opposition. You could be the nation’s Treasurer in fewer than two years. Given your position on the banks over the past period of time, how do you reckon that you will have productive relationships with the bank CEOs and boards if you were to become Treasurer?

BOWEN: We have points of disagreement but we also have an open and productive line of communication. I meet with bank chief executives regularly, with the boards, as late as last week I was meeting with a board of a bank. We have points of disagreement but I think it's important for them to understand what the Government and alternative Government have on their minds. What's concerning us and likewise for me to know what that's on theirs. I want a profitable, well-funded successful banking sector which is not based on scandals and rip-offs of consumers that’s what I want.

SALES: Well it's not based on that now is it?

BOWEN: I think we can accept Leigh, that there has been a rolling series of scandals.

SALES: You said based on. That's bit of an exaggeration.

BOWEN: Well Leigh, I don't think any rip-off is acceptable. I don't think any situation where consumers are manipulated is acceptable. As I said, I want a strong, profitable, robust banking and financial services sector. It's very important to Australia, and would be very important to me as Treasurer and I don't think it can be based on the sorts of behaviour and culture that we have seen in the last.

SALES: It's been a big day in federal politics, Labor's had to deal with the fallout of Senator Sam Dastyari, forced to resign his position within the Parliament over repeated missteps to do with China. Let's have a look at what he sad to say in the Senate this afternoon.

SENATOR SAM DASTYARI: I utterly reject any assertion that I leaked intelligence information to Mr Huang. Let me reiterate, that I have never been provided intelligence information by any Australian security agency ever. I have never passed on intelligence information. I have never been in the possession of any.

SALES: So, Chris Bowen, when we look at the totality of incidents involving Sam Dastyari, we have had him taking money from a Chinese businessman to pay expenses, we’ve had him warning a Chinese businessman that his phone was bugged by Australian intelligence services and now he's told porkies about what he told Chinese media on Labor’s policy on the South China Sea. Why does Labor consider this guy fit to be a senator?

BOWEN: Well Leigh, without accepting the entire premise of what you’ve put to me, I do accept he has made mistakes. He accepts that, he'd paid the price for that twice, two resignations. His career has suffered substantial set-backs.

SALES: But why remain in the Senate? He has got a bit of a pattern there of misleading.

BOWEN: He's made some mistakes. Now Bill Shorten has dealt with it. Until Malcolm Turnbull who has allowed Michaelia Cash to trash the Westminster tradition, or two cabinet ministers to remain in Cabinet despite the fact they were constitutionally barred.

SALES: Let's stick to Sam Dastyari.

BOWEN: I'm making the point though. Bill Shorten has acted. Malcolm Turnbull has been too weak to act when he should have. Bill Shorten acted last night.

SALES: So you think Sam Dastyari is a fit person to be a Senate?

BOWEN: Let me make this clear. Sam Dastyari is a patriotic and loyal Australian. Assertions to the contrary I reject. He's made mistakes. I suspect there's nobody in Australia who couldn't say they’ve made a mistake at some point in their career. He's paid a substantial price, he’ll be paying that price for some time.

SALES: Will he though? Last time he made a mistake and he stood aside it took five months for him to work his way back into an official position.

BOWEN: I think Sam would accept and I think we would accept he's paid a substantial price and it’s a substantial setback to his career, an appropriate one. It is a price to be paid. He has a contribution to make in the Senate.

SALES: Would you expect him if you did become Government at the next election to have some sort of official role within the Government.

BOWEN: I expect him to be regretting this for some time including after the next election.

SALES: Chris Bowen, thank you.

BOWEN: Thank you, Leigh.