BFCSA: Two-thirds of voters back Labor's call for Royal Commission into Bad to the Bone Banks

Almost two-thirds of voters support Labor's call for a royal commission into the banks, according to a new poll that will increase pressure on the federal cabinet to boost the powers and resources of the Australian Securities and Investments Commission when it meets this week.

The latest monthly Fairfax/Ipsos poll finds 65 per cent of voters support the royal commission while one-quarter, or 26 per cent, are opposed.

Support is highest among Labor and Greens voters at 78 per cent and 79 per cent respectively, while just over half of Coalition voters – 53 per cent – also support such a probe.

The poll of 1402 voters was taken from Thursday night to Saturday night last week, amid a fight between Labor and the Turnbull government as to whether the commission was needed.

The Fairfax poll findings are similar to others conducted in recent days.

Polling commissioned by Labor in a range of marginal electorates found that, for example, in the Victorian seat of Dunkley, vacated by outgoing former small business minister Bruce Billson, 70 per cent support the royal commission and 19 per cent disapprove.

Response to Murray recommendations

The government is seeking to combat the politically popular call by discussing with the banks an ASIC inquiry, and bringing forward deliberations over boosting the powers and resources of ASIC in response to recommendations from both the financial system inquiry headed by David Murray, as well as a capability review commissioned on the back of Murray.

Prime Minister Malcolm Turnbull, said on Sunday that Treasurer Scott Morrison was discussing an ASIC inquiry with the banks.

"I have not been but I'm sure the Treasurer is in conversation with the banks all the time as he should be," he said.

He said Labor's promise to hold a two-year, $53 million royal commission if elected, is both reckless and a distraction from this week's special sitting of Parliament, in which the government will push the Senate to pass two bills to increase the regulation of trade unions.

Mr Turnbull and Mr Morrison, who last week met ASIC chairman Greg Medcraft, argue all that is needed for financial services is a boosted regulator.

Cabinet on Tuesday is scheduled to sign off on a range of measures to boost ASIC, including possibly restoring some or all of the $120 million it lost in the Abbott government's 2014 budget.

It may also give ASIC product intervention powers, enabling it to unilaterally ban a product from a financial services provider, and introduce a tougher regime of civil penalties that can be applied.

Last week, The Australia Financial Review reported that cabinet will also consider a user-pays funding model, in which those that require the greatest level of regulation, such as banks, pay more to fund the regulator. Ths would raise between $250 million and $300 million a year while the government will provide some base funding. The previously announced desire to privatise ASIC's registry will also be on the agenda.

Speculation on ASIC inquiry

Apart from opinion polls, the government is also under internal pressure to act, with at least eight of its MPs and senators supporting a royal commission.

Labor says boosting ASIC is fine but that is no substitute for a royal commission, which takes an overarching look at the culture of the system, including the adequacy or otherwise of the regulators.

On Sunday, Opposition Leader Bill Shorten seized on revelations the government had been in contact with the banks in recent days over the issue.

"Mr Turnbull to so desperate to cover up for the banks that he's been talking with the banks about how to divert and stop a royal commission in to the banking sector," Mr Shorten said.

"Mr Turnbull needs to realise that his bosses are not the banks of Australia, but the Australian people."