“The government often cites COVID-19 to justify the delays in implementing the royal commissioner’s recommendations, however, that doesn’t pass the ‘pub test’ given consumer protections are needed more, not less, during times of financial uncertainty and turmoil,” said principal lawyer and ALA spokesperson Josh Mennen.

Mr Mennen added that two years have been “more than sufficient time” to implement the recommendations, which were made based on extensive hearings that revealed shocking corporate misconduct at the expense of vulnerable or disabled customers.

The long-promised compensation scheme of last resort is one of the many recommendations that have not yet been introduced and could have been used over the last two years to help consumers who have proven they were given negligent financial advice only to find that the advice firm has gone under and cannot pay up.

Mr Mennen said this compensation scheme would have been “invaluable” for those who have struggled during high unemployment and economic turmoil of COVID-19.

“It is unbelievable that some of the recommendations have been abandoned such as the ban on mortgage brokers receiving commissioners from lenders – a practice which incentivises brokers to load customers up with excessive mortgages and unsustainable debt,” Mr Mennen criticised.  

In the case of responsible lending reforms, he said that government has “defied” Commissioner Hayne’s directions with legislation currently before Parliament that aims to axe the bank’s obligations to make enquiries and verify whether consumers can afford the loan.

“This is a recipe for financial hardship,” Mr Mennen said.

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“Aspiring home-owners should be given support and guidance in understanding their credit limitations. Instead, they will have unprecedented access to credit with minimal accountability for banks and brokers who are riding high on an already inflated property market.”