Banks show 'disregard' for the law, Government MPs may cross the floor to back inquiry

Pressure for a commission of inquiry into the banking sector is growing, with Nationals senator Barry O'Sullivan warning he might have the numbers to push his private members bill through Parliament.

The banks "show an an almost autistic disregard for prudential regulation and law and it's time for these people to have their day in court", the senator told ABC's RN Breakfast on Monday.

Senator O'Sullivan said he has support from as many as four colleagues.

These include maverick Liberal National (LNP) MP George Christensen, who has already threatened to cross the floor, and fellow Queensland LNP MP Llew O'Brien, who has indicated "50-50" support.

An embarrassment for the Government

While a commission of inquiry would be an embarrassment for the Turnbull Government given its resistance to a royal commission, Senator O'Sullivan said it was time for the Prime Minister to listen.

"There's no more important piece of business — millions and millions of Australians have been affected by the behaviour of the banks over time," he said

"The people of Australia are sick to their eye teeth of the Parliament not functioning.

"If both houses of Parliament think this is a good thing to do … then I think the Prime Minister has to … sit up and take note of that, and support the parliamentary decision."

But Senator O'Sullivan refused to comment on whether his move would embarrass and further destabilise the Prime Minister.

"I am not going to be drawn on the question of the impacts on the Prime Minister and the Government — this is about democracy at work."

O'Sullivan 'committed to this course'

The proposed commission of inquiry would have similar powers to a royal commission.

It would also look beyond banking and include superannuation, insurance and services associated with the scandal-plagued sector.

While a royal commission needs to be established by the executive, a commission of inquiry can be passed if both houses of parliament agree.

However, Prime Minister Malcolm Turnbull has today emailed crossbenchers to inform them that the Lower House will resume sitting on December 4.

This timing coincides with the New England by-election, scheduled for December 2, which is expected to return former deputy prime minister Barnaby Joyce to office.

After that, it would take three MPs to cross the floor to bring on debate for a commission of inquiry in the Lower House, raising the potential vote of no confidence in the Government.

"A commission of inquiry can be decided by the parliament and I expect it will be binding on the executive of government. And I think the parliament is an appropriate place for a commission of inquiry to report back to," Senator O'Sullivan said.

"We are after all the legislators, and we are the ones who'll have to bring out legislation and regulation, prudential and otherwise.

"So I think [members of Parliament] … are the appropriate people to receive the report."

Senator O'Sullivan maintained that his private members bill has a good chance of being approved.

"A bill produced by the Greens made its way through the Senate without any difficulty, and my ambition is to ensure all that they want in an inquiry is homogenised into the bill that I'm developing," he said.

"I'm committed to this course now, and I have been for some period of time.

"There hasn't been a pathway before, so there are a number of us who are very keen on this issue and I think it's timely."

Senator O'Sullivan said an updated exposure draft of the bill could emerge on Wednesday or Thursday to deal with protections for small business and the rural sector in the terms of reference.

'No evidence' to justify a commission of inquiry

Australian Bankers Association chief executive Anna Bligh argued Senator O'Sullivan has not provided any evidence to justify a commission of inquiry or the estimated $53 million cost of a royal commission.

"As yet no one has seen legislation from Senator O'Sullivan and nobody knows what terms of reference he might be proposing, so it's impossible to comment," Ms Bligh said.

Ms Bligh accused Senator O'Sullivan and his supporters of "seeking revenge" because "they didn't get their way in the same-sex marriage debate".

"That's an extraordinary way to make public policy.

"Taking the first opportunity to go in and do something that would critically destabilise the Government I think will be seen for what it is."

Ms Bligh said the major banks would cooperate with any inquiry, but said customers had already been compensated for major scandals such as CommInsure.

Last week, former ANZ Bank chief executive Mike Smith said banks were being used by the Government as political capital saying "when you want to get mob interest you turn on the banks — Hitler did it."

Ms Bligh described Mr Smith's comments as "colourful" but agreed "there has been a level of demonisation in relation to banks that is unnecessary and unhelpful".