No accounting for banks? Frydenberg's response to the royal commission is on hold

Goodbye Kenneth Hayne’s grim crackdown on banks behaving badly. Hello Josh Frydenberg’s exciting new world of free-flowing credit.

And damn the consequences for the ordinary punter.

Nearly two years after Hayne, the banking royal commissioner, handed his final report to the treasurer at a meeting in Canberra as frosty as the capital’s winter mornings, this is where we stand.

No longer in the headlines are the tales of banks behaving badly that helped prompt Hayne’s inquiry: financial planners getting as rich as plum pudding by ripping off their clients; rubbish insurance that can never be claimed; the callous treatment of distressed borrowers.

With coronavirus wreaking havoc on health and economies across the world, there’s room for little else.

That’s how, as the 1 February anniversary of Hayne’s final report approaches again, we find ourselves with more than half of the commissioner’s recommendations either abandoned or yet to be implemented, despite the treasurer pledging to bring in the lot.

Related: Australian banking ends a year from hell as 'the face of unconscionable greed'

Nonetheless, Frydenberg hasn’t wasted the crisis.

It is true that he and the rest of the Morrison government were dragged kicking and screaming to inject meaningful stimulus into the economy – their initial response, on 12 March last year, was a pathetically small $17.6bn package that was soon overwhelmed by events, and it took another two goes in as many weeks before they settled on the program that was actually big enough to make a difference, jobkeeper.

To make room for the crisis response, implementation of Hayne’s agenda – 76 recommendations designed to bring a renegade banking sector within the operation of the law – was put on hold for six months.

But while there was not time to act on Hayne’s wishlist, which focused on protecting consumers from financial predation, there appears to have been plenty of room to get cracking on the Frydenberg program of trying to get money flowing by pumping up lending and cracking open people’s super savings – a move that happily doubled as an attack on the industry super sector, despised by many on the conservative side of politics for its links to the union movement.

One of Frydenberg’s most obvious moves in support of his dream of an economic rebound fuelled by bingeing on the old household credit card has been the abandonment of responsible lending laws, which were designed to protect consumers from having loans they couldn’t afford pushed on to them by bank salespeople.

The laws were used by a ginger group of government backbenchers to beat up on the corporate regulator, the Australian Securities and Investments Commission, after it lost a lawsuit against Westpac, dubbed the “wagyu and shiraz” case, over the issue.

Frydenberg explicitly linked getting rid of them to stimulating the economy – even though public hearings held by Asic in 2019 had established they weren’t a real impediment to lending.

Related: Frydenberg's move to dump lending laws 'shortsighted', consumer groups say

The move represented a clear move away from Hayne’s agenda: in his final report, the commissioner’s very first recommendation was that this law should not be changed.

Previously, Frydenberg’s biggest break with Hayne had been to allow mortgage brokers to continue to receive trailing commissions, which Hayne said should be abolished.

He’s since increased attacks on Asic, which has become a punching bag for ambitious backbenchers.

The regulator has improved since copping a beating at Hayne’s hands but remains a flawed institution. All the better to blame it for everything that goes wrong in regulation, even when it isn’t actually Asic’s fault.

Just after the new year, one of those ambitious backbenchers, Tim Wilson, used a column to slam Asic, saying it “keeps pushing out deadlines for compliance” with superannuation transparency laws.

It is true that these laws passed in 2013 and Asic has allowed funds until 2023 – a full decade later – to comply. But, as Guardian Australia has reported, this is because the government – where Wilson’s colleague Josh Frydenberg is treasurer – has so far failed to make the regulations needed to breath life into the law.

Frydenberg has also pursued changes to the law designed to make life easier for bosses and company directors, by insulating them from the consequences of their bad decisions.

He says the government has acted on 70% of the Hayne recommendations so far and he remains committed to implementing the remaining ones (except for the ones that have been abandoned, of course).

It is also true that this year a bunch more will come into force as legislation passed last year kicks into operation.

But much remains to be legislated, or even brought before the parliament.

And given the change in tone at the top, it is little wonder consumer advocates fear the lessons of the royal commission, the tears and heartbreak from victims in the witness stand, and the half-decade of scandals that led up to it, are being forgotten.

They’re right to do so.