Banks, insurers and superannuation funds have taken extraordinary steps to help customers survive the economic downturn.
This includes deferring repayments of loans worth $200 billion for up to six months for 643,00 loans for households and small business, according to the Australian Banking Association.
Superannuation funds have granted early access to $10 billion in super for 1.2 million members who have lost their jobs and income due to virus containment measures.
Labor financial services spokesman Stephen Jones said he was disappointed the changes had not already been legislated and the deferral must be a “once off” extension due to the virus.
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“We understand that right now we want banks and insurance companies focused 100 per cent on their customers and there is a lot to be worked through,” Mr Jones said.
He said there must be no delay to enforcing royal commission legislation already passed, such as the design and distribution powers overseen by the Australian Securities and Investments Commission.
The legislation the government had indicated it would introduce into parliament by June 30 will be introduced by December this year.
Measures slated to be introduced for legislating by December will be deferred to June 30, 2021.
Australian Banking Association chief executive Anna Bligh said: “The industry remains resolutely committed to implementing the recommendations of the royal commission and will continue to do so within the new timeframes set by the federal government.
“Today’s move by the government is a sensible recognition of the enormous efforts banks are making in supporting customers and the Australian economy through this COVID-19 health and economic crisis.”
Consumer advocate CHOICE chief executive Alan Kirkland said he welcomed the government’s commitment to implementing the recommendations.
“A six-month deferral strikes a sensible balance between recognising the reality of these unprecedented circumstances and the need to legislate reforms to protect consumers, who will need this even more in the coming months.
“We look forward to working with the government to finalise the remaining reforms as soon as possible.”
Commencement dates for draft legislation already released will also be delayed by six months.